Understanding credit derivatives and their potential to synthesize riskless assets

Antulio Bomfim

No 2001-50, Finance and Economics Discussion Series from Board of Governors of the Federal Reserve System (U.S.)

Abstract: The credit derivatives market is emerging as a potentially important new development that may help shape the overall financial markets in the years to come. In this paper, I provide a brief overview of the credit derivatives market and assess its future potential in the creation of private-sector instruments that are virtually free of default risk, and, thus, may be appealing to investors who currently favor the safety of U.S. Treasury securities.

Keywords: Credit; Risk; Derivative securities (search for similar items in EconPapers)
Date: 2001
New Economics Papers: this item is included in nep-pke
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Persistent link: https://EconPapers.repec.org/RePEc:fip:fedgfe:2001-50

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