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Remember ABX? Wall Street Said to Test New Mortgage Index

  • Unlike subprime era, underlying mortgages are high-quality
  • An index could help GSE reform by enlarging market for bonds
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A bond-market startup is a step closer to reviving crisis-era derivatives that let investors bet on U.S. homeowner defaults.

JPMorgan Chase & Co., Bank of America Corp. and Credit Suisse Group AG have given price data to the startup, New York-based Vista Capital Advisors, which rolled out the latest version of its pilot initiative this month, according to a person with knowledge of the matter. Vista has been working on the project for the past few years with Intercontinental Exchange Inc. The firm plans to use that data to create indexes of mortgage securities, which in turn would become the basis for the derivatives, said the person, who asked not to be identified because the matter is private.