Top China ADR Portal

China ADR stock research


Warning: strtotime(): It is not safe to rely on the system's timezone settings. You are *required* to use the date.timezone setting or the date_default_timezone_set() function. In case you used any of those methods and you are still getting this warning, you most likely misspelled the timezone identifier. We selected the timezone 'UTC' for now, but please set date.timezone to select your timezone. in /home1/chinaves/public_html/libraries/joomla/utilities/date.php on line 56

Warning: date(): It is not safe to rely on the system's timezone settings. You are *required* to use the date.timezone setting or the date_default_timezone_set() function. In case you used any of those methods and you are still getting this warning, you most likely misspelled the timezone identifier. We selected the timezone 'UTC' for now, but please set date.timezone to select your timezone. in /home1/chinaves/public_html/libraries/joomla/utilities/date.php on line 198

China To Allow Credit Default Swaps

E-mail Print PDF

economy4 September 14, 2010 (Chinavestor) China will allow the introduction of credit default swaps, the complex derivative instruments that gained notoriety during the global financial crisis, by the end of this year. China plans to take a more conservative approach to credit default swaps than has been applied in the U.S. and Europe, limiting the use of leverage on the swaps and banning the use of swaps on high-risk assets.

Credit default swaps are supposed to insure against issuer default on bond issues, but the instruments were used by U.S. and European investment banks and hedge funds to make large-scale bearish bets on stocks and other securities while global markets were plunging in 2008.

A popular tactic would be to short a company's stock, forcing the price down, and then go long that credit default swaps on that company's debt, profiting two ways as investors worried that the company was in danger of defaulting on its debt obligations due to the plunging share price.

It appears that China will allow no such chicanery when it allows credit default swaps into its financial markets. China plans to introduce credit derivatives to help manage risk in the nation’s growing domestic bond market, Bloomberg News reported. China says it has learned from the CDS mistakes made in the U.S. and Europe.



If you like us, spread the word to the fellow investors on your favorite Social Bookmarking websites
Reddit! Del.icio.us! Mixx! Free and Open Source Software News Google! Live! Facebook! StumbleUpon! TwitThis Joomla Free PHP
 

!!! CHINAVESTOR.COM is for SALE !!!

BUY this domain with all its credentials. Chinavestor.com has been added to Google News and Finance since 2008! Huge web traffic upside potential! Website is optimized for Chinese stocks but can easily be tweaked. Contact Seller Here

sale1
G_news
Check out The Benefits of Getting into Google News!