Subjects:

Banking and Finance

Contents:

The nature of credit derivatives.

Legal issues arising from credit derivatives.

Regulatory treatment of credit derivatives.

Capital adequacy and credit derivatives.

Documentation of credit derivatives under ISDA.

Seller liabilities in credit derivatives.

Accounting treatment of credit derivatives.

Tax treatment of credit derivatives.

Restitution, equity and payments under credit swaps.

Conclusions: Liability and opportunity for financial institutions.

Credit Derivatives are the newest product in the derivatives field. They offer investors a means of risk management through complex financial structures, whether by protection against changes in credit worth or by speculation on credit worth.

This work brings together the expert knowledge of a number of professionals in the field in order to address the legal, accounting and risk context of credit derivatives. It assesses, in detail, not only structuring issues, questions raised by the documentation of transactions, and complex risk assessment, but also issues as diverse as the taxation of these products, particular questions relating to sovereign issuers and accounting for credit derivatives. Key areas covered include:-

• What credit derivatives are
• What specific legal issues they engender
• How the standard market agreements work
• How their tax and accounting works
• How credit derivatives relate to other legal issues surrounding ordinary derivatives, along with recent case law on derivatives.