ValuSpread®, the independent price verification service for credit derivatives managed by Lombard Risk Systems, has recently come of age as the 22nd contributor firm has just started participating in the service.
The participants in ValuSpread include major investment banks, dominant end users of credit derivatives and other key firms in the credit derivatives market. Between them, they represent a definitive critical mass in terms of price validation for this market.
As the undisputable leader in its market, ValuSpread provides pricing information for more than 2,500 credits on a twice-monthly basis. ValuSpread makes nearly 20,000 data points available to its contributors and is an invaluable service for any product controller.
Patrick O’Kelly, Bear Stearns Capital Markets commented, "The risk management function at Bear Stearns finds ValuSpread to be extremely useful for validating the trading desk’s assessment of the mark-to-market of their credit positions. This independent verification of prices is critical from a regulatory perspective".
Lombard Risk Systems Ltd, part of the Lombard Risk Management group, see ValuSpread as being a key cornerstone of their valuation services and credit derivatives strategy. John Wisbey, CEO and founder of Lombard Risk, commented "Price transparency is a key feature of more mature markets and the provision of price and mark-to-market data for credit derivatives will open up the arena, bringing new participants and additional liquidity. Lombard Risk Systems is well placed to provide the market with the tools they need, by building on our excellent ValuSpread product."
The market that is already estimated at $1000bn notional is predicted to grow to $1766bn by the end of 2002 .