(Bloomberg) -- Hedge funds are borrowing too much to
finance investments in credit derivatives, contracts based on
debt, which may magnify volatility in a market downturn,
according to a Fitch Ratings survey of 65 banks, insurers and
money managers.
Hedge funds' influence on credit derivatives and debt
markets has continued to grow at a ``dramatic pace,'' Fitch said
in today's report. The funds are responsible for 60 percent of
all trading in credit-default swaps and about 33 percent of
collateralized debt obligations, securities that package debt,
the ratings company said, citing data from Greenwich Associates.
Read more at Bloomberg Bonds News
finance investments in credit derivatives, contracts based on
debt, which may magnify volatility in a market downturn,
according to a Fitch Ratings survey of 65 banks, insurers and
money managers.
Hedge funds' influence on credit derivatives and debt
markets has continued to grow at a ``dramatic pace,'' Fitch said
in today's report. The funds are responsible for 60 percent of
all trading in credit-default swaps and about 33 percent of
collateralized debt obligations, securities that package debt,
the ratings company said, citing data from Greenwich Associates.
Read more at Bloomberg Bonds News
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