The market for credit default swaps, the tools banks and fund managers use to hedge against losses on corporate and government debt, is on the rise again. The ongoing volatility in the financial markets is leading some investors to turn to CDSs for protection against default. A growing CDS market indicates the rising concern many shareholders have about the safety of their investments. While credit default swaps still have a bad reputation stemming from the role they played in inflating the global credit bubble that led to the 2008 financial crisis, they remain a useful tool for managing an investment portfolio. While a growing CDS market is another indicator of global economic concerns, it still remains a fraction of its size before the financial crisis. To read more, click here.
