Tag credit default swaps
In this post, we discussed how financial markets react to corporate behavior in the case of Arconic, the company providing the cladding material for Grenfell Tower. Recall that we found no significant impact on stock returns or CDS around the… Continue Reading →
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 →
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 →
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.
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 →