The failure of a large investment bank or securities firm, acting as counterparty in the $62 trillion (€40 trillion) credit derivatives market, poses the biggest systemic risk to the capital markets rather than the size and complexity of the derivatives market itself, according to a new report.

In a report yesterday on the credit default swap market, rating agency Moody's Investor Service said the sheer size of the market in notional terms and its exposure to "credit events" among underlying securities do not, in and of themselves, pose undue concern.