. Nonetheless, the average CDS-bond basis (i.e. the difference between both measures) is positive in the period 2004-2005. We detect …

We investigate the cross-sectional variation in the CDS-bond basis, which measures the difference between credit … default swap (CDS) spread and cash-bond implied credit spread. We test several explanations for the violation of the arbitrage … relation between cash bond and CDS contract, which states that the basis should be zero in normal conditions. The evidence is …

. Nonetheless, the average CDS-bond basis (i.e. the difference between both measures) is positive in the period 2004-2005. We detect …