Credit Default Swap

2 Posts
1 Sections
1 Types

January 1, 1 6 min read Definitions

Credit Default Swap CDS Credit Risk Derivatives Financial Markets Fixed-Income Investment Banking Risk Management

Credit Default Swaps (CDS) are financial agreements that function as a form of insurance against the default of a borrower. They allow the transferral of credit risk between parties.

January 1, 1 6 min read Definitions

Credit Default Swap (CDS)

Credit Default Swap Financial Derivatives Protection Buyer Protection Seller Reference Entity Default Over-the-Counter Trading

A Credit Default Swap (CDS) is a financial derivative contract in which a buyer makes periodic payments to a seller in exchange for compensation if a third party defaults on a loan or bond. Unlike insurance, the buyer doesn’t need to have a vested interest in the third party.