Study On The Accounting Information Disclosure Of Credit Default Swaps

In the late1990s, credit default swaps (CDS, Credit Default Swap) gradually began to beused in the management of credit risk from fundamental financial products. When credit defaultswaps has developed into the most active financial product in derivatives market, it also becamea trigger of the economic crisis in2008, which has more to do with the opacity and adequacy ofcredit derivatives accounting information.The credit default swaps market in China is still at the initial stage. For lack of developmentexperience domestic of credit derivatives market as well as relevant accounting standards, thereare many problems of credit derivatives. These hinder the development of the domestic creditderivatives market.This article regarded the accounting information disclosure of CRM as the research subject.Along with the current situation and existing problems in China, the paper aimed to analyze thedevelopment of the accounting standards system related to domestic and foreign creditderivatives, and critically learned disclosure experience abroad as reference. On this basis, theshortcoming and insufficient of the CRM information disclosure was summarized. Theimprovement suggestion was finally proposed to promote the credit default swaps to develophealthy in the financial market.This paper is divided into six sections. The first section describes the status of CDSdevelopment and the exploration at home and abroad. Besides, it briefly introduces the literaturereview and study methods. The second section demonstrates the basic theory of CDS accountinginformation disclosure. These reflect the necessity and importance of CDS accountinginformation disclosure. The third section points out the characteristics and the problems offoreign disclosure requirement and situation at the basis of Bank of America and AIG Group’sannual financial reports. In addition, this part summaries the oversea experience and lessons. Theforth section analyses the problem of CDS accounting information disclosure in the relevantparticipating institutions. The financial reports in the year of2010from domestic5banksprovided abundant information to make comparison. The fifth section concludes to propose improvement measurements of CDS accounting information disclosure. Through the unremittingefforts of market participants and supervision institutions, the enhancing transparency of creditderivative disclosure from accounting standards quality to comprehensive annual reportdisclosure will provide favorable conditions for the healthy development of our country’s CDSmarket.The innovation lies in：Firstly, according to the specific situation of Chinese CDS, thestudies in China were deficient. The improvement measurements of accounting informationdisclosure proposed in this article has practical significance in the domestic derivatives market.Secondly, so far these years, the domestic experts centered on studies mainly on creditderivative’s pricing or the risk management practice of business bank. The main points of thisarticle, such as the conclusion of disclosure at home and broad, the improvement measurementsof CDS accounting information disclosure, will fill the blank of existing domestic research.