The Promise of Credit Derivatives in Nonfinancial Corporations (and Why it's Failed to Materialize)

  title={The Promise of Credit Derivatives in Nonfinancial Corporations (and Why it's Failed to Materialize)},
  author={Charles W. Smithson and David L. Mengle},
  journal={Derivatives eJournal},
Although industrial companies played a big part in the growth of foreign exchange, interest rate, and commodity price derivatives, such companies have had almost no role in the growth of credit derivatives. As the authors point out, industrial corporates are exposed to credit risk in a variety of ways, including customer accounts receivable, longer-term supply contracts, loans to customers and vendors, and counterparty exposures. Credit derivatives, moreover, would allow corporate users to… 

Credit Derivatives: An Overview

Arising from financial institutions' need to hedge and diversify credit risk, credit derivatives have now become a major investment tool. Almost all credit derivatives take the form of the credit

Protecting Against Sovereign Defaults

Chapter 2 analyzes the various means used by creditors to mitigate sovereign risk well in advance – that is, when countries issue bonds, sign loan agreements, or are at an early stage of their

Pharmaceutical Manufacturing Companies in Kenya and Their Credit Risk Management Practices

The pharmaceutical industry in Kenya consists of manufacturers, distributors and retailers, who all actively support the Ministry of Health and other key players in developing the health sector.

Credit Default Swap: Regulations, Changes and Systemic Risk

The CDS market grew significantly in 2007 and it have claimed that it has been allowed to become too large without proper regulation and that, because all contracts are privately negotiated, the

A critical evaluation of the European credit default swap reform: Its challenges and adverse effects as a result of insufficient assumptions

An understanding of Over-The-Counter (OTC) derivatives – particularly Credit Default Swaps (CDSs) – is essential, because these derivatives are often accused of being toxic and a significant

CEO stock-option compensation and the use of credit default swaps in relation to European bank risk

This thesis investigates two main aspects related to the use of credit default swaps (CDS) by European banks. The first area of investigation focuses on the relationship between the CEOs’ risk-taking

E C O N O M I C R E V I E W Fourth Quarter 2007 How Credit Derivatives Work Credit Derivatives: an Overview

A derivative is a bilateral agreement that shifts risk from one party to another; its value is derived from the value of an underlying price, rate, index, or financial instrument. A credit derivative

Three Essays on the European Sovereign Debt Crisis with a Special Focus on Greece

THREE ESSAYS ON THE EUROPEAN SOVEREIGN DEBT CRISIS WITH A SPECIAL FOCUS ON GREECE by FLORA LEVENTI Advisor: Professor Merih Uctum This dissertation consists of three chapters where I examine several

A Decision Support Approach for Accounts Receivable Risk Management

  • D. WuD. OlsonC. Luo
  • Economics, Business
    IEEE Transactions on Systems, Man, and Cybernetics: Systems
  • 2014
A decision support model for a large bank enabling assessment of risk of default on the part of loan recipients and accuracy results are presented, enabling accounts receivable managers to confidently apply statistical analysis through data mining to manage their risk.

Investigating the challenges of data, pricing and modelling to enable agent based simulation of the Credit Default Swap market

Three proposed solutions drawn from three main subject areas: Statistic, Genetic Programming (GP), and Agent-Based Modeling (ABM) to help enable agent-based simulation of Credit Default Swap (CDS) market are detailed.