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The market for credit default swaps: new insights into investors' use of accounting information?


  • Paul A. Griffin
  • Steven Cahan


type="main" xml:id="acfi12092-abs-0001"> The market for credit default swaps has developed into a well-functioning, global multi-trillion dollar market, wherein investors price and transfer corporate financial instruments on the basis of credit risk. This paper first summarizes the structure and growth of the market. Next, I introduce theory and evidence on how investors price credits risk and explain how the quality of financial statement information plays a unique role in the determination of credit spread. I then review the nascent empirical accounting literature on this topic. This review sheds light on several accounting research questions that might be understood better in the setting of the credit default swap market. The final section summarizes suggestions for future work.

Suggested Citation

  • Paul A. Griffin & Steven Cahan, 2014. "The market for credit default swaps: new insights into investors' use of accounting information?," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 54(3), pages 847-883, September.
  • Handle: RePEc:bla:acctfi:v:54:y:2014:i:3:p:847-883

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    1. repec:bla:acctfi:v:57:y:2017:i::p:117-145 is not listed on IDEAS
    2. Augustin, Patrick & Subrahmanyam, Marti G. & Tang, Dragon Yongjun & Wang, Sarah Qian, 2014. "Credit Default Swaps: A Survey," Foundations and Trends(R) in Finance, now publishers, vol. 9(1-2), pages 1-196, December.

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