Good for Lockyer: Calif is alway first California treasurer joins debate on CDS

Bill Lockyer, California’s state treasurer, asked large banks that sell the state’s bonds for information about credit default swaps, including each bank’s role in making markets for California and other municipal CDS, the types of clients and trading volumes.

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The growth of taxable “muni” bonds, led by California, is expected to increase the use of CDS for munis because it has opened this market to large, international buyers who also trade CDS.
According to the DTCC, the number of CDS contracts on California over the past year rose to 422 from 160. The value is still small, however, with a maximum payout in default adding up to $908m £598m). The state has more than $75bn of general obligation debt.