4  BIS Review 67/2002  In addition, the U.K. Financial Services Authority and the Bank of England have issued reports on credit derivatives in recent years. Thanks to these efforts, we have a much better picture of the credit derivatives market than we did a year or two ago.
These groups have all reported that they find no evidence that the credit derivatives market threatens financial stability. The nonbank firms that are active in the credit derivatives market, notably some insurance companies, do appear to understand the nature of the risk they are taking on.