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credit default swaps

Better Double-Safe than Sorry? CDS Counterparty Risk Mitigation

In a recent post, we discussed the Oehmke and Zawadowski (2017) paper. The authors identify hedging, speculation, and arbitrage as the main CDS trading motives. We now zoom in on one of these motives: hedging. The article “Mitigating Counterparty Risk”… Continue Reading →

Central Clearing in CDS Markets – Solution to a Non-Problem?

The financial crisis 2007/2008 again revealed that counterparty risk is front and center in financial markets. A consequence of counterparty risk: reliable market participants, with a low default probability, can require extra compensation for trading with riskier counterparties – at… Continue Reading →

Central Clearing and CDS Market Liquidity

We supervised a thesis this semester on the impact of central clearing on market liquidity for credit default swaps (CDS). In this post, we want to share the main results.

How Financial Markets Incorporate News – A Case Study of the Grenfell Tower Disaster Using Regression Discontinuity

On June 14, 2017, a fridge-freezer on the 4th floor of the Grenfell Tower block in London caught fire. The fire quickly spread, causing a horrible loss of at least 80 lives and injuring more than 70 people. Firefighters quickly… Continue Reading →

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