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Pandemic disrupted the entire world and affected many industries.
Get detailed COVID-19 impact analysis on the Credit Default Swap Market
Request Now !A credit default swap (CDS) is a contract that allows two or more parties to transfer the credit risk associated with fixed income products. In a CDS, the buyer of the swap makes payments to the seller of the swap until the contract's maturity date. In exchange, the seller agrees to pay the buyer with security's value as well as all interest payments. Therefore, the increase in payment ticket size, easy accessibility of swaps, and the cost saved by the consumer is expected to boost the market growth of the credit default swap market in the near future.
The global credit default swap market is segmented on the basis of type, end user, and region. Based on type, the market is divided into municipal bonds, emerging market bonds, mortgage-backed securities, corporate bonds, and others.
On the basis of end user, the market is bifurcated into individual and enterprises. Geographically, the market is analyzed across several regions such as North America, Europe, Asia-Pacific, and Latin America, Middle East & Africa (LAMEA).
Top Impacting Factors
The rise in demand for cash alternatives and the availability of affordable and low-cost credit swap facilities are the major drivers of the market. Furthermore, developments in the forex trade and an increase in offshore investment as a result of adding funds fuel the growth of the credit default swap market.Â
However, the lack of standardization is expected to hamper the market growth. Contrarily, new rules and regulations implemented by the government to stabilize the market and increase the number of internet users. Also, developments in the E-commerce industry are expected to provide lucrative opportunities for the market in the future.
The Rise in Demand For Cash Alternatives
According to a recent study, advisers are seeing an increase in demand for fixed income investments and clients want low-risk investments with higher returns than traditional cash-based swaps. The credit swap market reduces the risk of overspending because there is a time limit imposed. These swaps can be loaded quickly and easily through a variety of platforms, including bank account transfers, direct deposit, or cash, both online and in person.Â
Furthermore, corporations are constantly looking for cash alternatives to manage their day-to-day transactions. According to the Federal Deposit Insurance Corporation, 6.5 percent of U.S. households were unbanked in 2018, implying that 8.4 million U.S. households are still operating in the economy without a bank account. Credit default swap cards enable unbanked consumers to conveniently access essential payment services. The company can also use this card to track expenses, fund cards, and details of interest amounts in real-time. All of these factors are fuelling the market growth.
Increase in the Number of Internet Users And Developments in the E-commerce Industry
The rapid growth of the e-commerce industry has compelled businesses to use credit default swaps rather than cash transactions in their wallets. According to several banks, the credit default swaps segment has been one of the key factors driving bills payable, short-term credit, and prepaid card sales globally.Â
For example, the Dubai payments industry is undergoing significant change, with a large number of consumers abandoning their swap platforms in favor of a new payment tool known as the "credit default swap market". These cards can be used in place of credit default swaps and are easily accessible to non-banked businesses. As a result, the dominance of the market is expected to grow which creates lucrative opportunities for the market.
Key Benefits of the Repor
COVID-19 Scenario Analysis
Questions Answered in the Credit Default Swap Market Research Report
Credit Default Swap Market Report Highlights
Aspects | Details |
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By End User |
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By Region |
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Key Market Players | UBS, Morgan Stanley, Bank of America Corporation., JPMorgan Chase & Co., Goldman Sachs, Royal Bank of Canada, Charles Schwab & Co., Citigroup Inc., Julius Baer Group, CREDIT SUISSE GROUP |
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