S&P Indices and the International Swaps and Derivatives Association, Inc. (ISDA) have launched a new index measuring the credit quality of the U.S. and European banking sectors.
S&P and ISDA say the S&P/ISDA CDS U.S. Financials Select 10 Index and the S&P/ISDA CDS European Banks Select 15 Index will increase transparency in this sector of the market as they may be used as a basis for a credit default swap and also track the overall health of the U.S. Financial and European Banking sectors.
Since the credit crisis began, market participants have been looking for efficient methods to hedge against perceived counterparty risk within the U.S. financial and European banking sectors, says Michael Kondas, associate director at S&P Indices. The launch of the S&P/ISDA CDS U.S. Financials Select 10 Index and the S&P/ISDA CDS European Banks Select 15 Index will provide that measure of counterparty credit risk the market has been seeking.
George Handjinicolaou, deputy CEO and head of Europe, Middle East and Africa at ISDA, adds: We are very pleased that we are able to broaden the family of S&P/ISDA CDS Indices with the launch of the S&P/ISDA CDS U.S. Financials Select 10 Index and the S&P/ISDA CDS European Banks Select 15 Index. These CDS Indices will further increase transparency and efficiency in the OTC derivatives market.
(CG)