JPMorgan Chase - Credit Derivatives

Credit Derivatives

The derivatives team at JP Morgan, (including Blythe Masters), was a pioneer in the invention of credit derivatives such as the credit default swap. The first CDS was created to allow Exxon to borrow money from JP Morgan while JP Morgan transferred the risk to the European Bank of Reconstruction and Development. JP Morgan's team later created the 'BISTRO', a bundle of credit default swaps that was the progenitor of the Synthetic CDO. JP Morgan currently has the largest credit default swap and credit derivatives portfolio by total notional amount of any US bank.