OTC Fortress

While opinions vary on whether the turmoil gripping the global credit markets is waning or not, concerns over counterparty risk in the wake of Bear Stearns' collapse are fueling anxiety. A report from ratings agency Moody's Investor Service released in late May concludes that "the most significant systemic risk posed by credit default swaps (CDSes) is the effect the failure of a major CDS counterparty, such as a large universal bank or securities firm, would have on the operational integrity