Historically, decisions on whether to advance money to a customer rested with the lender. The advent of credit derivatives allows for capital markets participants to shift the credit risk associated with loans and securities. Credit default swaps (CDS) dominate the credit derivative landscape.
Other types of credit derivatives include total returns swaps and credit indexes. Cash instruments coming under this topic include collateralized debt obligations (CDOs) along with collateralized loan obligations (CLOs) and collateralized bond obligations (CBOs). Credit linked notes (CLNs) are also part of this category.
GFMI offers a full suite of credit derivatives courses. Following are just a few examples from our credit derivatives curriculum: