[see slide 5] The development of these markets is undoubtedly contributing to the efficiency and stability of the financial system by allowing financial intermediaries to measure and manage their  4  BIS Review 121/2006  credit risks more efficiently and effectively, primarily by buying protection in the credit default swaps (CDS) market.
At the same time, there have been concerns that rapidly increasing credit risk transfer (CRT) activity may be leading to concentrations of risk among agents who might not be able to bear it in a more challenging environment, particularly in the case of the more complex structured credit products where investors may have been attracted by high short-term returns.