Q&A: counterparty risk - Spot the differentiation

The credit quality of product issuers has become a prime concern following the downfall of US investment bank Bear Stearns. Sophia Morrell asks seven industry players - issuing banks, an index provider, a distributor, a risk analysis and pricing company and a lawyer - about how counterparty risk is affecting business in the US

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Structured Products: How sensitive are investors to an issuer's credit rating? Do they distinguish between the credit quality of different institutions?

Anna Pinedo, partner, Morrison and Foerster: Investors are particularly sensitive to all of the headlines about write-downs at the large financial institutions and the ratings downgrades or ratings warnings that have followed. Investors anticipate that there will be additional write-downs by large financial institutions and, as a consequence

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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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