AI giants borrow wildly, Wall Street is busy protecting itself: brewing risk transfer, buying default swaps wildly...

According to the Securities Times APP, Wall Street is preparing to provide huge loans to the giants in the field of artificial intelligence (AI), while also working hard to protect themselves from any bubbles that may be fueled by their financing. The urgency of banks cutting risk exposure is clear across the credit market. The cost of using derivatives to protect Oracle (ORCL.US) debt from default has risen to the highest level since the global financial crisis in 2008. Morgan Stanley is considering using significant risk transfer (a form of insurance against loan losses) to diversify some of the risks associated with its technology company borrowers.