The race for the missing credit risk solution

The credit derivatives market’s rapid growth – both in terms of volumes and product complexity – has in some respects left dealers and end-users scrambling to develop analytics and data systems to support their decisions. Clive Davidson examines the current technology challenges and the solutions on offer

Although credit derivatives can be viewed as an extension of the fixed-income markets, they exhibit sufficiently unique characteristics to require new tools – including data and analytics – to price, revalue and manage their risks, some of which can be extremely complex. While the major dealers – the specialist brokers and investment banks – generally have the resources to gather their own data and develop their own tools, smaller organisations or firms wanting to enter the market quickly are