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credit derivative


Definition
A contract between two parties that allows for the use of a derivative instrument to transfer credit risk from one party to another. The party transferring risk away has to pay a fee to the party that will take the risk.


Related Terms

synthetic collateralized debt obligation -  More

shadow banking system -  More

Constant Proportion Debt Obligation (CPDO) -  More

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credit derivative is ...

... part of the Lending & Credit subject.

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