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Friday May 13, 08:09
Bankers worry about credit market
(by Dr.Goldfinger)

Bankers worry about credit market Credit market is a risky place now, say some bankers and regulators. They are seeking ways to find the core problem for the market that turned sour.

The main issue bankers and regulators are facing now is how big the market is for collateralised debt obligations (CDO). Some analysts say that the problem is in the deep opacity of the market that does not want to show its real face to the investors. “The problem is that the market is pretty opaque – and in circumstances like these people don’t really want to reveal things too much,” according to Neill Thomas, head of debt advisory at KPMG.

Mr. Thomas also added that it is not really important what figure you use while heading to the mechanisms of credit market. “If you want to put a size on the market, frankly you could put any figure you want.”

In spite of the fact that the market is mainly closed, investors are sometimes able to look what is behind the curtain as some CDO issuance step to a public arena. In 2004, publicly announced and rated CDO issuance amounted to $120bn, Thomson Financial data shows.

CDO market sees the fastest pace of growth in Europe with the rapidly growing figures in Europe for 2004.
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