Counting on the counterparty

High-profile banking failures have led to uncertainty over the ability of credit derivatives counterparties to honour their side of the trade. Contingent credit default swaps, or CCDS, are designed to mitigate this risk. But will plans for a central counterparty clearing house scupper any future growth of the CCDS market? William Rhode reports

Contingent credit default swaps, or CCDS, may seem reminiscent of those days when anything that sounded like an acronym from Star Wars was touted as the next big thing in credit protection.

Looking back, it's easy to dismiss those days and those products as nothing more than spaghetti junction logic, a tangled mess miles away from the fundamental and sound principles of straightforward credit assessment. And if the events of the past 15 months have succeeded in doing anything, they have at least