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What is the purpose of CDSs?
[À quoi servent les CDS ?]

Author

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  • Dorian Henricot
  • Thibaut Piquard

Abstract

Credit Default Swaps (CDSs) are derivatives designed to insure counterparties against the default of a debt issuer. They are traded for arbitrage, hedging or speculative purposes. Between 2016 and 2021, hedging accounted for 19% of CDS purchases by the investors covered by this study. These investors sell more CDSs on the most concentrated debt exposures in their portfolios. Les Credit Default Swaps (CDS) sont des produits dérivés permettant de s’assurer contre le défaut d’un émetteur de dette. Ils sont échangés à des fins d’arbitrage, de couverture ou de spéculation. Entre 2016 et 2021, la couverture représente 19% des achats de CDS par les investisseurs considérés dans cette étude. Ces derniers vendent plus de CDS sur les expositions en dette les plus concentrées de leur portefeuille.

Suggested Citation

  • Dorian Henricot & Thibaut Piquard, . "What is the purpose of CDSs? [À quoi servent les CDS ?]," Eco Notepad (in progress), Banque de France.
    • Handle: RePEc:bfr:econot:338
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