Staff View: Credit derivatives: Do they matter to avoid credit exposure? (Some evidences from the US market)

Credit derivatives: Do they matter to avoid credit exposure? (Some evidences from the US market)

Credit derivatives (CDs) have been increasingly acknowledged as an important requirement to hedge and transfer credit risk CR. Nonetheless, they have been extensively criticized for destabilizing the whole economic system bringing about the latest subprime credit crisis. The study�s main aim is to i...

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Main Authors:	Alnassar W.I., Chin O.
Other Authors:	57204890085
Format:	Article
Published:	Serials Publications 2023
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spelling	my.uniten.dspace-233502023-05-29T14:39:42Z Credit derivatives: Do they matter to avoid credit exposure? (Some evidences from the US market) Alnassar W.I. Chin O. 57204890085 57204888403 Credit derivatives (CDs) have been increasingly acknowledged as an important requirement to hedge and transfer credit risk CR. Nonetheless, they have been extensively criticized for destabilizing the whole economic system bringing about the latest subprime credit crisis. The study�s main aim is to investigate the reason for the use of (CDs), whether it is used for hedging or trade purpose, for four of the US international financial institutions that had made it through the 2007 crisis to resume functioning post-crisis. This will be for three different and critical periods, namely the pre, during and after crisis periods (Q1, 2000-Q1, 2014). Adopting the SUR technique, the investigation of the factors that influence the net position of (CDs) as to achieve the main purpose is made possible. It has been found that the use of (CDs) is inconsistent with the predictions of theories of risk management to this day. The implication is that most derivatives positions are held for dealer activities rather than for loan hedging. Reflecting that financial institutions also resort to using (CDs) for trading and speculation, this provides an indication for a risk-taking motive. Entities that have a better position in regard of their size, capital and net interest margin make greater use of (CDs) for this purpose. � Serials Publications Pvt. Ltd. Final 2023-05-29T06:39:42Z 2023-05-29T06:39:42Z 2017 Article 2-s2.0-85057640890 https://www.scopus.com/inward/record.uri?eid=2-s2.0-85057640890&partnerID=40&md5=ba888c83010a3ded0689d404a29ae4ac https://irepository.uniten.edu.my/handle/123456789/23350 14 16 321 333 Serials Publications Scopus
institution	Universiti Tenaga Nasional
building	UNITEN Library
collection	Institutional Repository
continent	Asia
country	Malaysia
content_provider	Universiti Tenaga Nasional
content_source	UNITEN Institutional Repository
url_provider	http://dspace.uniten.edu.my/
description	Credit derivatives (CDs) have been increasingly acknowledged as an important requirement to hedge and transfer credit risk CR. Nonetheless, they have been extensively criticized for destabilizing the whole economic system bringing about the latest subprime credit crisis. The study�s main aim is to investigate the reason for the use of (CDs), whether it is used for hedging or trade purpose, for four of the US international financial institutions that had made it through the 2007 crisis to resume functioning post-crisis. This will be for three different and critical periods, namely the pre, during and after crisis periods (Q1, 2000-Q1, 2014). Adopting the SUR technique, the investigation of the factors that influence the net position of (CDs) as to achieve the main purpose is made possible. It has been found that the use of (CDs) is inconsistent with the predictions of theories of risk management to this day. The implication is that most derivatives positions are held for dealer activities rather than for loan hedging. Reflecting that financial institutions also resort to using (CDs) for trading and speculation, this provides an indication for a risk-taking motive. Entities that have a better position in regard of their size, capital and net interest margin make greater use of (CDs) for this purpose. � Serials Publications Pvt. Ltd.
author2	57204890085
author_facet	57204890085 Alnassar W.I. Chin O.
format	Article
author	Alnassar W.I. Chin O.
spellingShingle	Alnassar W.I. Chin O. Credit derivatives: Do they matter to avoid credit exposure? (Some evidences from the US market)
author_sort	Alnassar W.I.
title	Credit derivatives: Do they matter to avoid credit exposure? (Some evidences from the US market)
title_short	Credit derivatives: Do they matter to avoid credit exposure? (Some evidences from the US market)
title_full	Credit derivatives: Do they matter to avoid credit exposure? (Some evidences from the US market)
title_fullStr	Credit derivatives: Do they matter to avoid credit exposure? (Some evidences from the US market)
title_full_unstemmed	Credit derivatives: Do they matter to avoid credit exposure? (Some evidences from the US market)
title_sort	credit derivatives: do they matter to avoid credit exposure? (some evidences from the us market)
publisher	Serials Publications
publishDate	2023
_version_	1806426687435440128
score	13.211869

Credit derivatives: Do they matter to avoid credit exposure? (Some evidences from the US market)

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