Dealers use CDSs to transfer credit risk, BIS says

12/13/2011 | Nasdaq.com

The Bank for International Settlements said derivatives dealers have transferred a significant amount of credit risk to shadow banks. "To the extent that such risks remain, they appear to have been passed on from the banking sector to parts of the non-bank financial sector often known as shadow banks," according to the BIS, which noted that dealers used credit default swaps to shift the risk.

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