![]() Few people even in the debt markets are entirely familiar with the panel’s internal workings, and its deliberations rarely make front-page news. Whether and when the trigger is pulled is a decision for an industry body known as the Credit Derivatives Determinations Committee. Fortunes can be earned from these credit default swaps when a borrower runs into trouble and the lender’s insurance policy is triggered. Late in the last century, such provisions evolved to become tradable securities used not only as a form of protection, but also as a wager on the creditworthiness of banks, corporations and even nations. ![]() If you’ve lent someone money and they can’t pay you back, the chances are you’ll be OK if you bought insurance against the loss. ![]()
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