Behind The Mask

Shepherd, Bill
June 2003
Investment Dealers' Digest;6/9/2003, Vol. 69 Issue 23, p24
Trade Publication
The article focuses on various controversies related to credit derivatives, one of Wall Street's hottest revenue generators. The main argument in favor of credit derivatives is that they have helped banks weather an onslaught of corporate defaults. During the most recent recession, U.S. and European corporate bond defaults were six times higher than in the 1990-1991 downturn, $215 billion compared with $36 billion, according to Robert Grossman, chief credit officer at Fitch Ratings. Yet the U.S. banking system has remained remarkably strong. Other big U.S. bank players include Citigroup and Bank of America, and investment banks and European banks are in the market.


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