Credit Suisse Said to Study Novel Bond Sale

The transcript discusses a Bloomberg report on Credit Suisse's potential issuance of catastrophe bonds, typically used by insurance companies, to cover risks like cybersecurity crimes and rogue trading. The conversation highlights the hefty risk premiums in the market for entities lacking robust controls, especially in cyberspace. It also explores how investment banks might adapt to changing M&A activities and the distinction between managing rogue traders and external cyber threats. The discussion concludes with an analysis of the potential benefits of such bonds in quantifying and limiting risks.

What is the primary purpose of catastrophe bonds as discussed in the video?

• To increase shareholder value

• To safeguard against natural disasters

• To protect against financial fraud

• To ensure employee satisfaction

Why might Credit Suisse consider using catastrophe bonds for cyber security?

• To reduce operational costs

• To enhance employee training

• To improve customer service

• To mitigate risks from external cyber threats

What is a significant risk for companies lacking robust controls?

• Increased employee turnover

• Higher risk premiums in the market

• Lower customer satisfaction

• Decreased product quality

How can investment banks adapt to the changing landscape of M&A activity?

• By exploring new mechanisms to extract value

• By reducing their workforce

• By focusing on traditional trading methods

• By increasing their marketing budgets

What is a key similarity between preparing for cybercrime and natural disasters?

• Both are easily predictable

• Both involve external threats

• Both require employee training

• Both can be ignored without consequence