Creditex takes derivatives to Web

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Derivatives are the financial industry's equivalent of brain surgery. Dik Blewitt's job is to let clients know that the business can be grasped easily -- over the Internet.

Blewitt is in charge of signing on the Wall Street crowd as users of creditex, the world's first online exchange of credit, or over-the-counter, derivatives. It's a huge business. More than $1 trillion in credit derivatives are traded annually, mostly by the big global investment banks. But Blewitt's marketing message is distinctly down home. "We're an eBay for credit derivatives," he said.

Since it launched in March, creditex has emerged as the leader in its space. Blewitt, a J.P. Morgan & Co. vet, has helped creditex attract a distinguished crowd of financial backers and users. These include Deutsche Bank AG, Morgan Stanley Dean Witter & Co., The New York City Investment Fund (headed by Kohlberg Kravis Roberts & Co. founder Henry Kravis) and J.P. Morgan.

creditex allows its users, most of whom are investment bankers and insurance execs, to bid online for derivatives contracts that can run into the tens of millions of dollars and higher. Most derivatives dealing is done today over the phone.

creditex is taking steps to make its site easy enough to use for its next target user base, nonfinancial corporations, Blewitt said. The company recently introduced a feature that allows users to view their accounts over personal digital assistants.

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