Basel III's CVA capital charge will spur demand for CDS

11/2/2011 | (subscription required)

Dealers said demand for sovereign credit default swaps will remain and possibly increase because of the Basel III capital charge for credit-value adjustment. Questions abound about the CDS market because a 50% haircut on Greek debt is not expected to trigger the insurance contracts. But traders said the CVA charge, which will be introduced in 2013, ensures continued existence of the CDS market.

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