Platforms jostle for CDS index space
Olesky: "Addressing the
New services could help solve operational risk issues in credit derivatives
MarketAxess and TradeWeb both announced long anticipated credit default swap indices trading platforms in May. Given the current volatility and dislocation in the CDS indices sector, the timing could not be better.
Both the US Federal Reserve Board and the UK's FSA have sounded the alarm in recent weeks over the boom of credit derivatives activity. Although most fixed income
specialists have spent the past three weeks speculating how much dealers have lost on OTC traded CDS, it is operational risks that the watchdogs have most voiced their
concern on, not credit risk. In light of this, both MarketAxess and TradeWeb are marketing their products as key to solving these operational exposures.
"We believe the development of our CDS index trading platform will be a significant milestone for the credit industry, bringing important operational efficiencies and ease of execution to both dealers and institutional investors," says Richard McVey, CEO at MarketAxess.