Credit Suisse employees set to dominate CDO market in 2012, reports FT

So how are the bankers going to MTM their position? In all practical sense this makes a lot of sense. I guess one could do a similar thing for stock options, that is pooling them for periodic redemptions/exercises ..

With political pressure and new rules on bonuses, plus banks capital issues, I don't understand why other banks are not doing something similar. Maybe given the success of PAF1 for CS, it is easier for CS to do this type of trade. It makes a lot of sense if they can get the capital relief, and it probably is better bet then CS stock!

This could be a super senior regulatory capital trade for the bank. A neat idea as instead of doing it with a monoline, CDPC or someone else who won't be there when you need them, why not do it with your own employees on a collateralised basis as you retain their bonuses so counterparty risk is zero

Probably good for the correlation desk traders as everyone will want to be "friends" with them to see what their personal mark to market position is every 5 mins. May also generate additional business for them with employees looking to delta hedge their positions post bonus time. Result could by that the CS is effectively announcing to the market it's desk will be buying protection on this portfolio in the coming year; that will help prices

Does this mean CS bankers now get paid based on the same CDO valuations they've been using for their clients?! What a nightmare for them!

Probably a better bet than CS stock.