J.P. Morgan, Goldman Veil DV Risk

Two of the world’s biggest traders of credit derivatives JPMorgan Chase & Co. and Goldman Sachs Group have sold protection on more than $5 trillion of debt around the world.

Two of the world’s biggest traders of credit derivatives JPMorgan Chase & Co. and Goldman Sachs Group have sold protection on more than $5 trillion of debt around the world, Bloomberg reports. As tensions rise on the creditworthiness of Greece, Italy, Ireland, Portugal and Spain (Giips), investors are not being informed about how much risk U.S. banks face from a default.

Firms including the two banks do not give a complete picture of potential losses and gains in such a scenario, giving only net numbers or excluding some derivatives altogether. As of September 30, Goldman Sachs revealed only “funded” exposure to Giips debt, which is $4.16 billion before hedges and $2.46 billion after, excluding commitments or contingent payments, such as credit-default swaps. J.P. Morgan’s announced that its net exposure was not above $1.5 billion, with a part coming from debt and equity securities, but did not give gross numbers.

Click here for the story from Bloomberg.