Tuesday, July 31, 2007
CDS: buyers and sellers
--banks are net buyers of credit protection. As dealers, they tend to run a matched book. As end-users, they are net buyers.
--regional, still big, anks are net sellers of protection, especially in Europe
--insuraners are net sellers
a.credit default uncorrelated with their underwriten risk
b.preimium is high
c.financial strength
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