Credit Derivatives. Credit Derivatives. A credit derivative financial instrument Allows participants to decouple credit risk from an asset and place it with another party. Credit Risk.
Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.
Credit risk is the risk of loss due to a Debtor's non-payment of a Loan or other line of Credit, either the Principal or Interest (Coupon) or both.
To reduce or strip out Credit risk, Risk Manager may :
Make loss provisions
Actively manage the Credit Risk Exposure
or use Credit Derivatives : Credit Default Swaps (CDS)
(change in the terms of the debt that are adverse for creditors)