TORONTO -- The movement of credit-default and other forms of complex financial swaps into electronically managed and centrally cleared markets may be increasing rather than lowering risk, Michael Bodson, chief operating officer of Depository Trust and Clearing Corporation said Tuesday at SIBOS 2011 here.

Credit-default swaps are “scary, scary products,” Bodson said in a discussion of the transaction infrastructure that is emerging after the 2008 global credit crisis. The exchange of risks involved in these swaps may not fit well on a transaction model that has been used for futures contracts, which are simpler forms of derivative securities.

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