I have been using CreditGrades to calculate fair one year CDS spreads for firms. However, the authors of the model explicitly say that the model does not hold for banks or financial firms. If I need to price a thereotical one year CDS spread for a financial firm, what are some suggestions or starting points for an alternative model for accomplishing this? Could I potentially modify the assumptions of the CreditGrades model to hold for banks?
This is the creditgrades technical document: http://www.creditrisk.ru/publications/files_attached/cgtechdoc.pdf