Incorporating:     Credit Derivatives   Sales & Trading   Risk Management   Structuring & Marketing   Credit has become a buzz-word over the last two years. The emerging market crisis increased the emphasis on credit quality. Spurred on by the global financial turmoil, credit derivatives are one of the fastest-growing risk management products. Meanwhile, credit investing is taking off in Europe as a result of monetary union. Defaults or near defaults in Russia put the market into a quandary. Contract documentation was often too loose to deal with such a volatile environment, leaving questions as to what constitutes a credit event. The International Swaps and Derivatives Association stepped in, producing a definitions booklet for use in credit default transactions and working on an arbitration service to help resolve disputes between counter-parties. These measures helped improve liquidity in the market and therefore credit derivatives have resumed their stunning growth in 2000. Industry experts are developing numerous new and exotic ways for credit derivatives to expand. But growth will mainly come from increased activity in bread and butter credit default swaps. Commercial and investment banks have embraced credit derivatives as new revenue opportunities, while insurance companies, securities firms and some corporates are looking to use credit derivatives for default protection. Commercial banks account for half of credit derivatives turnover. To these users the mitigation of credit risk is secondary to the desire to release regulatory capital. Credit default swaps can turn unproductive loan portfolios, which are suffering from falling returns, into a valuable part of a bank's portfolio.