Exchanges to offer credit derivatives

12 December 2006

The position held by Morgan Stanley, Deutsche Bank AG and Goldman Sachs in the credit derivatives market is expected to be weakened in the coming year.

Euronext is planning to offer contracts based on credit-default swaps.

The credit-default swaps are expected to open up the derivatives market by being easier to understand than the banks' derivatives and cheaper to trade.

Nigel Sillis of Baring Asset told Bloomberg: "It would be an advantage to use credit-default swaps. If they're traded on an exchange it will be easier to convince clients to allow us to use credit-default swaps.''

Euronext, which is set to merge with the NYSE Group, also announced today the acquisition of corporate news distributor Hugin for $27 million.

It follows the Paris-based European exchange's expansion into the news distribution market with the acquisition of French firm Companynews in March.

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