Transparency: a more efficient market

Until recently, liquidity and transparency were the last things most investors thought of with regard to the CDO market. But that is changing, as demonstrated by recent moves by leading market participants to provide investors with more detailed information

In the early days of its development, a common complaint about the CDO market was that its continued opacity and illiquidity acted as deterrents to many would-be participants, thus preventing it from realising its true potential.

One of the most important and encouraging features of the CDO market over the past year or two is that misgivings about illiquidity have largely receded. "The term 'black box' has started to leave CDOs and credit derivatives, just as it did for equity and interest rate