China has postponed a plan to introduce credit default swaps in domestic markets in the face of objections from regulators and officials, the Financial Times reported. The plan to introduce CDS had enjoyed enough suport from the central bank to reach an advanced stage but was considered suspect by regulators given the role complex credit derivative instruments played in the global financial crisis. Supporters of the plan changed the name for CDS to "credit risk mitigation contracts" but the new name was not enough to convince regulators, who argued that China’s bond market remains too immature to support such a scheme. Sources familiar with the project said that Beijing may allow a very small pilot project by the end of the year.
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