Credit Derivatives Applications

Overview/Description
The ongoing rapid growth of credit derivatives, which began in the late 1900s, has primarily been fueled by the requirements of large international banks to manage their regulatory capital requirements and increase the efficiency of their capital reserves. This has led to a wider acceptance of these instruments, mainly as a means to remove credit risk off the books of one entity and onto the books of another who is willing to accept it. In addition to large international banks, many smaller regional banks and insurance and reinsurance providers, as well as institutional investors, hedge funds, and corporations, have become the users of credit derivatives. This course gives a brief overview of the general characteristics of credit derivatives and the market for them, including the major participants and the roles they play. It also examines various credit risk applications from banking, investor, and corporate applications.

Target Audience
Financial services professionals, consultants, and sales professionals interested in providing or selling products and services to banks, investment companies, and other financial corporations, and everyone interested in creation and use of credit derivative instruments

Expected Duration (hours)
1.0

Lesson Objectives

Credit Derivatives Applications

• recognize the broad categories of credit derivatives
• describe users' roles in credit derivatives
• identify the broad categories of credit derivatives and describe the users' roles in credit derivatives
• identify bank applications of credit derivatives
• identify the common uses of credit derivatives to institutional investors
• identify the corporate uses of credit derivatives
• identify the financial applications of credit derivatives
• describe how credit derivatives can be used as advanced market indicators
• identify how credit derivatives can be used as advanced market indicators