2008University of North Texas Digital Library (University of North Texas)Open access

Credit Default Swaps: Frequently Asked Questions

Edward Vincent Murphy

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Abstract

Credit default swaps are contracts that provide protection against default by third parties, similar to insurance. These financial derivatives are used by banks and other financial institutions to manage risk. This report defines credit default swaps, explains their use by banks for risk management, and discusses the potential for systemic risk.

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Credit default swaps are contracts that provide protection against default by third parties, similar to insurance. These financial derivatives are used by banks and other financial institutions to manage risk. This report defines credit default swaps, explains their use by banks for risk management, and discusses the potential for systemic risk.

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Available abstract

Credit default swaps are contracts that provide protection against default by third parties, similar to insurance. These financial derivatives are used by banks and other financial institutions to manage risk. This report defines credit default swaps, explains their use by banks for risk management, and discusses the potential for systemic risk.

Key concepts: Credit default swap, Credit derivative, Default, Business, iTraxx, Credit default swap index, Credit risk, Financial system

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