New CDS index aims to broaden hedging of US bank exposure
CDX Financials will include inactive or untraded single names referencing smaller institutions
A new credit default swap (CDS) index is set to fill a gap for traders hedging US bank exposures and expand the list of tradeable single-name swaps to include smaller banks.
Market participants see the index, CDX Financials, as complementary to the existing North American investment-grade CDS index, which excludes liquid contracts referencing banks like Bank of America, Citi, and Goldman Sachs.
“People have seen it as a non-financials index rather than a broad index. This addresses that need. Now
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