(Bloomberg) -- Credit derivatives may create risks to the financial markets if events prompt investors to exit at the same time, said European Central Bank President Jean-Claude Trichet.
Investors ``may react in a way that can suddenly lead to dangerous herding behavior,'' said Trichet, who was speaking in Boston at the annual meeting of the International Swaps and Derivatives Association, which represents 750 banks and securities firms. ``Such situations are also a matter of concern from a systemic liquidity viewpoint.''
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