Credit Default Swaps should not be banned, says the Economist

It makes a case for modifying how CDS work, and say that
"CDSs have their uses. There is no reason why investors should not speculate in corporate debt if they can speculate on equities, currencies, commodities and the rest."

Famous last words, don't you think?

Second thoughts on Lloyd's TSB-HBOS merger

The Economist carries an article that outlines not just the delicate balances one has to strike when a bank bailout is decided upon, but also proposes rolling back of the Lloyd's-HBOS merger, on grounds that if taxpayers' money will go to the merged entity, then HBOS may as well be rescued on its own, as that would then retain competition, which the proposed merger threatens to reduce.

Credit Default Swaps

Jayanth Varma of IIM, Ahmedabad, draws atention to the fact that the Depository Trust and Clearing Corporation of the US has published what is perhaps the first comprehensive official numbers on the global credit default swap market, including the top 1000 reference names, that account for over 95% of the market by gross notional value and a little less than 90% by net notional value.

Global gross notional exposure is $15.38 Trillion and Net notional exposure is $1.76 Trillion.

There are 4 Indian-owned entities in this list (ICICI, Reliance Industries, State Bank of India and Corus).

The gross and net notional exposures of these 4 Indian entities is $30.8 Billion and $3.8 Billion respectively.

Suggestions for a healthier debt market

In this informative article, the India CEO of Citigroup suggests some steps India can consider to improve the state of its debt markets.