4
September
Banks, not commods, at risk from China OTC defaults
4 September 2009 Forbes
China's latest warning shot across the bow of its nascent derivatives industry sent shivers through markets this week, but it's bank risk salesmen, not oil or grains traders, who should fear the fallout.
If Chinese state-owned companies do walk away from losing over-the-counter deals -- an outcome that many industry officials still believe is unlikely given the legal battles that would ensue -- investment banks holding the other side of those trades could face hundreds of millions of dollars in losses.
