David Clementi, deputy governor at the Bank of England,
says the use of credit derivatives in securitization poses a threat
to capital market stability.
In the closing address to the International Bond Congress in
London, Clementi surprised borrowers, investors and bankers with
his concerns at the rapid growth of credit derivatives and ABS
markets, which many banks hope compensate for the shrinking returns
in bond trading and underwriting.
Clementi said there was a danger...
