shares was concerning as it showed investors were on edge and could be spooked by moves in the small market for credit default swaps , European Central Bank supervisor Andrea Enria said on Tuesday.
Enria said the CDS market is relatively small and illiquid, but that a selloff there could have broader ramifications for the much larger share market. He called for CDS, a form of insurance for bondholders, to be centrally cleared. “There are markets like the single-name CDS market which are very opaque, very shallow and very illiquid, and with a few million the fear spreads to the trillion-euro-assets banks and contaminates stock prices and also deposit outflows.”
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