Parsimonious Credit Risk Pricing Model for Corporate Bonds and Credit Derivatives Markets

2021 ◽  
Author(s):  
Vadim Borue
Keyword(s):  
Credit Risk ◽  
Corporate Bonds ◽  
Credit Derivatives ◽  
Pricing Model ◽  
Risk Pricing ◽  
Credit Risk Pricing ◽  
Derivatives Markets

The Effects of Innovative Instruments to Market Participants and the Financial System

2010 ◽  
pp. 204-220
Author(s):  
Demetres N. Subeniotis ◽  
Ioannis A. Tampakoudis
Keyword(s):  
Credit Risk ◽  
Financial Institutions ◽  
Portfolio Management ◽  
Credit Derivatives ◽  
Policy Makers ◽  
Market Participants ◽  
Financial Firms ◽  
Innovative Products ◽  
Risk Pricing ◽  
Credit Risk Pricing

Financial innovation triggered new ways in which financial institutions and corporates cope with credit risk since the advent of credit derivatives. A variety of new developed financial instruments, often complex products, offers significant advantages to market participants and its key players and in particular financial institutions. As statistics indicate, advanced computerization is by large the most important factor for the wide use of credit derivatives. More efficient loans portfolio management, further business expansion and confidentiality are the main benefits for banks. In addition, various non financial firms benefit from these tailor-made products. More importantly, credit derivatives are key elements of the financial systems’ stability, through increased liquidity, risk reallocation and credit risk pricing. Nevertheless, these innovative products are accompanied by significant considerations on behalf of users and policy makers. Out of which documentation, pricing, regulation and concentration are the central concerns. Market participants and regulators should face the challenges of credit derivatives market so as to boost the trouble-free intensive growth of these instruments.

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