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Synthetic risk, real issues: secondary transfers of credit risk instruments

19 March 2024 / Author(s): Michael Brown , Thea Gausel
Issue: March 2023 / Categories: Feature

There are many ways of synthetically transferring risk, including credit default swaps, sub-participations, financial guarantees and insurance related products. Each such method (the relevant contract/instrument being an “Instrument”) gives rise to unique considerations but there are several points that are likely to be relevant whenever the party that has synthetically acquired the risk wishes to transfer its position to a third party. This article considers those relevant issues.

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