It is clear that new found love for CS has empowere India's move into the mainstream Asian trading markets though RBI has made it clear it would not allow NBFCs to write CDS contracts or short any "default" underwritten by a CDS contract. This should be direct Net worth criteria instead of class as banks or companies allowing treasuries to play with both sides of the CDS contract. CDS spreads and profits on trade rise when default rating risk increases.

A writer gains when the country's / corporates's default rating risk is seen to increase, just like a  buyer or insurer gains when default risk is lowered

Posted via email from The India Investment Post