June 2, 2010 / 9:00 PM / 10 years ago

Brazil, Mexico, Greece most actively traded CDS

NEW YORK, June 2 (Reuters) - Credit default swaps insuring the debt of countries including Brazil, Mexico, Turkey, Greece and Spain were the most actively traded in the past year, while swaps on most companies traded less than 10 times per day, according to data released on Wednesday.

The Depository Trust & Clearing Corp, a trade warehouse, studied trading volumes in credit default swaps backed by the debt of a single issuer in order to help determine which contracts may be suitable for central clearing.

Lawmakers and regulators want standard and liquid CDS, which are used to protect against a debt default or to speculate on a borrower’s credit quality, to be entered into central clearing houses to reduce risks associated with the failure of a major counterparty.

Brazil’s CDS were the most active, trading 42 times per day on average in the study period between June 20, 2009, and March 19, 2010, the DTCC data showed.

CDS on Mexico, Turkey, Greece, Spain and Russia were also active, with an daily average of 37, 33, 27, 26 and 25 trades per day, respectively, the data showed.

Contracts based on the debt of companies traded less frequently, with many trading only once or twice per day, the data showed. Companies with the most actively traded swaps included General Electric Capital Corp (GE.N), which traded 23 times per day on average during the study period.

CDS on large U.S. banks were also relatively active, with Bank of America’s (BAC.N) CDS trading on average 21 times per day and JPMorgan (JPM.N) trading 18 times per day. (Reporting by Karen Brettell; Editing by Leslie Adler)

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