This paper analyzes banks' usage of CDS. Combining bank syndicated loan data with a unique EU-wide dataset on bilateral CDS positions, authors note that stronger banks in terms of capital, funding and profitability tend to hedge more. They found no evidence of banks using the CDS market for capital relief. Banks are more likely to hedge exposures to relatively riskier borrowers and less likely to sell CDS protection on domestic firms. Lead arrangers tend to buy more protection, potentially exacerbating asymmetric information problems. Dealer banks seem insensitive to firm risk, and hedge more than non-dealers when they are more profitable. These results allow for a better understanding of banks' credit risk management