Scotia Capital is preparing to become a credit derivatives market maker in European names in London. Matt Giffen, director, credit derivatives sales at Bank of Nova Scotia in London, said the bank's investment banking division will soon start making markets in investment grade single-name credit default swaps, total return swaps and first-to-default baskets.
Expanding into Europe makes sense because the bank can leverage off its London-based loan syndication and secondary loan-trading desk. Its European loan presence means that it has both credit exposure to manage and customers who would be interested in the products. The bank trades credit derivatives out of New York and Toronto. Because these desks have done well, Scotia Capital has decided to enter the European market. It has recently received approval to staff up the department and begin making markets.
The bank plans to double the size of the department to 10 by year end, according to Giffen. The extra five professionals will be in sales and structuring.
