(Bloomberg) -- Global financial regulators should take a closer look at credit default swaps after relatively small transactions in the market amplified last week’s banking turmoil, according to the European Central Bank’s top oversight official.

The Financial Stability Board, which brings together authorities from around the world, could review “how these markets really work,” said Andrea Enria, who leads the ECB’s Supervisory Board. 

The collapse of several US banks and rescue of Credit Suisse Group AG earlier this month has investors on edge as they question whether other lenders could suffer from rising rates or other pressures. European regulators have sought to underline that they have a close watch on risks and that their banks are on a sounder footing. 

“Notwithstanding all the efforts we have made with regulatory reform, we see that there are markets like the single name CDS market which are very opaque, very shallow, very illiquid,” said Enria. “With a few millions, you can move the CDS spreads” of a major bank “and contaminate also stock prices and possibly also deposit outflows,” he said, without naming any banks.

Speaking at a conference hosted by German newspaper Handelsblatt, Enria suggested that improving the degree of information on the CDS market may be a better course of action for authorities than prohibitions or new rules. 

“It’s always the last resort for a supervisor to intervene,” he said. “If you had good transparency, for example having these markets all centrally cleared rather than have OTC (over the counter) opaque transactions where you don’t know who is trading, I think that would be already great progress.”

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