Credit derivatives next market threat - Rathbone

The warning comes as equity markets rallied on back of a cut in US interest rates by the Federal Reserve. But Julian Chillingworth, chief investment officer at Rathbone, says investors should not relax as credit derivatives could suffer from downgrades. He says: “There are still several unknowns out there, making even high quality credit derivatives vulnerable to severe downgrades. “The problem has rested with the sub-prime market that then spilled over to the credit derivatives market. "We’ve got an extended problem; the banks have been selling these instruments for some while and the ...