Insurance companies’ slow embrace

Credit derivatives

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Massimo Sala, chief financial officer at Monte Paschi Vita Group, the life insurance arm of Gruppo Monte dei Paschi di Siena, in Rome, is reluctant to use credit derivatives or structured credit products for his firm’s retail products. “We did not feel comfortable passing leveraged exposure to the credit market on to the retail market in this financial environment,” Sala says. So far, his firm has only used such a tool in its retail products once – a credit-linked note (CLN) on a

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Credit risk & modelling – Special report 2021

This Risk special report provides an insight on the challenges facing banks in measuring and mitigating credit risk in the current environment, and the strategies they are deploying to adapt to a more stringent regulatory approach.

The wild world of credit models

The Covid-19 pandemic has induced a kind of schizophrenia in loan-loss models. When the pandemic hit, banks overprovisioned for credit losses on the assumption that the economy would head south. But when government stimulus packages put wads of cash in…

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