Bankrupt Banker: world's biggest traders of credit derivatives

JPMorgan Chase & Co. and Goldman Sachs Group Inc., among the world's biggest traders of credit derivatives, have disclosed to shareholders that they have sold protection on more than $5 trillion of debt

<p> </p><p>JPMorgan Chase & Co. and Goldman Sachs Group Inc., among the world's biggest traders of credit derivatives, have disclosed to shareholders that they have sold protection on more than $5 trillion of debt globally.  Just don't ask them how much of that was issued by Greece, Italy, Ireland, Portugal, and Spain, sometimes known as the GIIPS, or even PIIGS.  As concerns mount that those countries may not be creditworthy, investors are being kept in the dark about how much risk U.S. banks face from a default. Firms including Goldman Sachs and JPMorgan do not provide a full picture of potential losses and gains in such a scenario, giving only net numbers or excluding some derivatives altogether.  "If you don't have to, generally people don't see the advantage to doing it," said Richard Lindsey, a former director of market regulation at the Securities and Exchange Commission who worked at Bear Stearns Cos. from 1999 through 2006. "On the other hand, if there were a run on Goldman Sachs tomorrow because the rumor was that they had exposure to Greece, you'd see them produce those numbers."</p>

JPMorgan Chase & Co. and Goldman Sachs Group Inc., among the world's biggest traders of credit derivatives, have disclosed to shar...