Surging credit derivatives market proves key as a price indicator

Default swaps are increasingly being used to gude straight financing

Tuesday 2 January 2001 at 16:00

Strip away the hyperbole characteristic of all financial markets and you will find two handrails guiding the growth of European credit investment: six-month Libor and five-year default swap rates.

The first, Libor, is increasingly well recognised as a truer guide than government bond yields to broad capital markets pricing.