The Australian credit derivatives market has bucked a global trend and shrunk over the last year. Last week's Australian Financial Markets Association's survey showed credit derivatives volumes were down about 20% to AUD22 billion (USD12.1 billion) from AUD28 billion. In contrast the British Banker's Association's recent survey showed the global market had grown from USD1.189 trillion to USD1.952 trillion over the same period (DW, 9/23).
"Spreads in Australia are tight and there's not many credit concerns," said Stephane Delacote, head of credit derivatives at BNP Paribas in Tokyo, explaining the lack of activity in the Aussie credit mart. He added, "There aren't many big moves on spreads as in Japan or Europe or the U.S."
"This year was an aberration," said Fergus Gilbert, head of credit trading at the Commonwealth Bank of Australia in Sydney and chairman of the AFMA credit derivatives committee. Greg Wrate, policy director at AFMA in Sydney, said, "The general feeling on the investor side is that with a possible decline in Commonwealth government bond issues, investors will look more into taking credit risk through corporate bonds and credit derivatives."
