OKO Bank Consolidated, the commercial banking arm of the Finnish OKO Bank Group that has EUR32.5 billion (USD34.76 billion) under management, is planning to make its first foray into credit derivatives. The bank will use credit-default swaps to hedge its loan portfolio and also is planning to become a dealer, according to Eero Ketola, an official in the group treasury in Helsinki. The bank does not plan to invest in credit-linked notes or structure collateralized debt obligations, he added.
The firm is in the process of establishing in-house technology and trading infrastructure to execute default-swaps and provide the instruments to its clients. Ketola hopes to be ready in the spring to actively trade the products and has been speaking with top credit derivatives houses, which he declined to name, about its imminent entry.
