Risk.net

Smart derivative contracts: detaching transactions from counterparty credit risk

Introducing deterministic termination rules to eliminate counterparty risk in smart derivatives

  • LinkedIn  
  • Save this article
  • Print this page  

CLICK HERE TO VIEW THE PDF

Christian Fries and Peter Kohl-Landgraf describe a smart derivative contract with a fully deterministic termination that removes many of the inefficiencies in collateralised over-the-counter transactions. The automatic and deterministically defined termination procedure in the smart contract represents an option right. This feature replaces counterparty credit risk with contractually defined termination risk

We consider a special variant of a smart derivative

Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.

To access these options, along with all other subscription benefits, please contact [email protected] or view our subscription options here: http://subscriptions.risk.net/subscribe

You are currently unable to copy this content. Please contact [email protected] to find out more.

Copyright Infopro Digital Limited. All rights reserved.

You may share this content using our article tools. Printing this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/

If you would like to purchase additional rights please email [email protected]

Copyright Infopro Digital Limited. All rights reserved.

You may share this content using our article tools. Copying this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/

If you would like to purchase additional rights please email [email protected]

To continue reading...

More on Banking

7 days in 60 seconds

Most read on Risk.net

  1. Stanford’s Duffie shakes up SOFR credit race with AXI index
  2. IFRS 9 and the loan loss lottery
  3. The unintended impact of collateral on financial stability
  4. CFTC block trade plan gets cold shoulder
  5. Cross-currency confusion stalks FCA announcements

You need to sign in to use this feature. If you don’t have a Risk.net account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an individual account here: