Banks traded heavily in CDS market on sub-prime contagion fears

Banks and financial services companies topped the list of most actively traded sectors in the US credit default swap market last month amid increasing concerns over the industry’s exposure to problems in the subprime mortgage market, GFI, the inter-dealer broker, said on Monday. A recent spike in late payments and defaults on home loans has prompted a flurry of CDS trading in banks and financial services companies with exposure to the troubled industry.