
Banks Wanted to Keep the CDS Market to Themselves - wglb
http://www.bloombergview.com/articles/2015-09-11/banks-wanted-to-keep-the-cds-market-to-themselves
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chollida1
This isn't terribly surprising. There is an entire company (Markit) that
sprang up because it started with a database of CDO/CDS prices giving it an
advantage over the rest of the market.

If you have a Bloomberg terminal, then you'll see that everyday there are 2 or
3 stories about the head trader for CDS's from one sell side firm moved to a
buy side Firm or another sell side firm. The entire derivative industry is
about as incestuous as you can get.

To be fair to the banks, the reason why the stock market is so open is that
shares are fungible. CDS, CDOS's and most other swap instruments really
aren't.

They all have their own terms, hierarchy in bankruptcy proceedings, and
special terms that you really do need to examine each one that you are buying
to check all the details. This implies illiquid markets, which has always
meant the need for sales people to bring together two sides of the trade,
which unfortunately leads to the situation described in the article.

