International Financial Reporting Standards (IFRS)

The risks of tailoring credit default swaps

Credit portfolio managers could tailor credit default swap hedges as financial guarantees to avoid accounting mismatches on their balance sheet. However, the technique exposes credit hedgers to increased costs and basis risk, argues Dirk Schubert

Fair-value freeze in Japan

Corporates and financial institutions have long awaited the introduction of the internationally accepted fair-value option to hedge accounting in Japan. They believe a fair-value option would allow more institutions to hedge their risks, particularly in…

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