Where to purchase credit default swaps

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Countervailing Duties Duties that are imposed in order to counter the negative impact of import subsidies to protect domestic producers are called countervailing duties. Cross Elasticity of Demand The measure of responsiveness of the demand for a good towards the change in the price of a related good is called cross price elasticity of demand.

Definition: Credit default swaps CDS are a type of insurance against default risk by a particular company. To put the enormous size of the credit default swaps market in perspective, the entire U. Unlike true insurance, a purchaser of a credit default swap need not own the bond being insured i. This allows rampant speculation in credit default swaps by parties who have no interest in hedging against default by an issuer of a bond they own. Indeed, the market value of credit default swaps far exceeds the value of the bonds that they ostensibly insure.

In , hedge funds accounted for 60 percent of the trading of credit default swaps, and many of them used borrowed money to purchase credit default swaps, further exacerbating the risk. Counterparty risk is a major concern of regulators. Unlike insurance companies, however, sellers of credit default swaps are not regulated; there is no backstop if a CDS seller defaults on its payment obligations other than the U.

The asset management services and investment products are not available to persons where provision of such services and products is unauthorised. This communication is provided for general information only without taking into account the objectives, financial situation or needs of any particular investors. Box , Toronto, ON, M5L 1G2 services and products may only be available in certain provinces or territories of Canada and only through dealers authorized for that purpose.

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