The volume of default protection taken out on core-European sovereigns has fallen by almost a third since the summer, with analysts attributing the decline to a ban on taking naked CDS positions and ECB action to stabilise the region's bond markets.

As the attached chart from JP Morgan shows, outstanding CDS volumes are down 30% from last August, having fallen from $80bn to $57bn. The bank's analysts said the drop was driven by 33% declines in the amount of CDS written on French and German government bonds.