In addition to stunning growth rates, a key milestone in the world of credit risk was the launch in June 2004 of the two single European and US credit default swap indices, iTraxx and CDX. This allowed credit risk to become a separate asset class, and price discovery for this risk increasingly took place in the derivatives market segment.
These two indices have provided valuable information throughout the crisis, reflecting the fact that, overall this market has continued to function. However, credit derivatives have three interrelated structural implications which may have gradually affected the efficiency of the financial markets since their outset.