Risk management by structured derivative product companies

William F. Bassett, In Sun Geoum and Eli Remolona
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William F. Bassett: https://www.federalreserve.gov/econres/william-f-bassett.htm

Economic Policy Review, 1996, vol. 2, issue Apr, 17-37

Abstract: In the early 1990s, some U.S. securities firms and foreign banks began creating subsidiary vehicles--known as structured derivative product companies (DPCs)--whose special risk management approaches enabled them to obtain triple-A credit ratings with the least amount of capital. At first, market observers expected credit-sensitive customers to turn increasingly to these DPCs. However, the authors find that structured DPCs--despite their superior ratings--have failed to live up to their initial promise and have yet to gain a competitive edge as intermediaries in the derivatives markets.

Keywords: Risk; Derivative securities (search for similar items in EconPapers)
Date: 1996
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