Savings banks pool credit risk

Vesper: ?Germany’s deficit increase is essentially a revenue problem. The weak recovery of the economy combined with tax cuts has lowered the tax revenue?

German savings banks are using credit default swaps to reduce their credit risk concentration for the first time.

Thirteen savings banks from Hesse-Thuringia and nine from Bavaria are pooling credit risk synthetically, using platforms set up by the respective states’ Landesbanken.

In the Bavarian deal, S-BayernBasket 1, the savings banks buy protection on individual reference entities from an Irish special purpose vehicle.