Bank of Ireland is looking at using credit derivatives to systematically hedge its credit exposure for the first time. The bank is considering buying protection to hedge 0-20% risk weighted assets, such as government bonds and bank paper, according to Kevin Twomey, an official in the bank's treasury.
The bank has used less than a handful of credit derivatives in the past and is looking at extending that because of the growth of the default swap market, said Twomey. He predicted the bank would make a decision in the coming four months as it gathers more information, but declined further comment.
