It may seem high-level and purely political at the moment,
but renewed European focus on regulating the credit default
swap (CDS) market could hit financial institutions hard, with
London at particular risk.
The latest round of discussions on derivatives regulation
has sprung up following the Greek debt crisis, with politicians
blaming speculative trading in CDS on the countrys
sovereign debt for exacerbating its problems.
When it was just Greece calling for a ban on speculative
trading, the plea was easier to ignore. But in the past week
France, Germany and, most worryingly, the UK have added their
voices to the debate.
The uproar is similar to the backlash against hedge funds
that followed the collapses of Bear Stearns and...