JPMorgan sent an e-mail to its credit-default swap index clients last week which laid out the firm's opposition to a rival default swap index. "Competing indices are bad for clients, as they cannibalize liquidity," the e-mail stated. The e-mail was in response to an agreement by 11 dealers to launch an index of 125 investment-grade North American credit-default swaps, dubbed iBoxx N.A. I.G. A JPMorgan official confirmed the e-mail.
The e-mail also went on to query the motivation for launching a rival index. "It seems silly to hurt clients for no reason other than dealer pride."
One of the main objections of rival dealers was that
TRAC-X is not administrated by an independent third party. The e-mail, however, said JPMorgan and Morgan Stanley are in "advanced discussions" with Dow Jones about handing over the index. A firm official predicted that this would be finalized this week.
