BIS: Derivatives Dealers Have Transferred Credit Risk To Shadow Banks Since 2010
By Geoffrey T. Smith
Published December 11 2011 Dow Jones
Derivatives dealers have transferred large amounts of credit risk to opaque and largely unregulated parts of the financial system, often using instruments that were themselves opaque, the Bank for International Settlements said Sunday in its quarterly report. In a chapter updating its statistics on credit derivatives, the BIS said that the overall amount of credit risk transferred through credit default swaps remained small, relative to the overall size of the banks, insurers and hedge funds that account for most of the trade in such instruments.
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