Shinsei Bank is launching a dedicated credit-default swap trading desk in Tokyo and has just hired Mark Thompson, director in credit trading at WestLB in London, as general manager in the capital markets division to spearhead the effort. "There is certainly short- to medium-term potential in this market, particularly with spreads widening," said Thompson. "Clients are starting to take a look again." Credit trading has been difficult in the Japanese market for some time due to chronically tight-spreads, but following the General Motors Corp. downgrade (DW, 5/9) spreads globally have been shifting outwards.
Shinsei has offered structured credit products for some time, but the firm is now looking at marketing a wider range of single-name products as well as default-swap trading for customers. "Japanese banks are now more comfortable with their systems and structuring these types of products," Thompson noted, explaining Japanese firms have become more competitive in the credit market.
The trading effort will be launched by the next quarter and a handful of staff recruited both internally and from outside the bank will be in place. Prior to a two-year stint in London, Thompson spent seven years in Tokyo working at WestLB and UBS.
