A credit derivative is a financial contract allowing the transfer of credit risk between two counterparties. It allows an investor to increase or decrease their exposure to the default of bonds or loans of a corporate or sovereign entity.
The most common credit derivative is a credit default swap. CDS is a type of insurance contract where an investor buys insurance on a referenced entity and receives a payout in the event of default. Where CDS differs from an ordinary insurance contract is th
The week on Risk.net, July 7-13, 2018Receive this by email