VOLUMES AND LIQUIDITY in credit derivatives have grown at a rate that has pleasantly surprised even the market's most dedicated supporters.The leading bank dealers couldn't be happier. They say credit derivatives are revolutionizing corporate bond markets, bringing liquidity and two-way trading.
Certainly the market has enabled these banks to manage their own credit exposures far more effectively - the purpose it was originally conceived for. But institutional investors in the corporate debt market have been slower to warm to the new instruments.