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The development of a liquid and transparent CCDS market is in the interests of both OTC derivative dealers and market regulators. However, the current challenging market environment coupled with the complex and esoteric nature of CCR has discouraged the participation of non-bank financial institutions in the CCDS market.
To address the emerging imbalance between the supply and demand for CCDS protection, the OTC derivatives market requires a highly rated non-bank financial institution with the prerequisite risk management acumen to promote the effective regulatory risk transfer of CCR and its transformation into “plain vanilla” products, which can be more readily distributed to traditional institutional investors in the global capital markets.
To alleviate the systemic imbalance in the CCDS market, Novarum Group has established a dedicated, independently rated operating subsidiary, Novarum Global Trading GmbH, to provide CCDS protection to participants in the global OTC derivatives market. |
