14

INTRODUCING CREDIT DERIVATIVES

14.1 Development of the credit derivatives market

14.2 Motivations for using credit derivatives

14.3 Introducing credit default swaps (CDS)

14.4 Market conventions

14.5 Credit events and determination committees

14.6 Capital structure, recovery rates, reference and deliverable obligations

14.7 Settlement methods and auctions

14.8 Other aspects of CDS

The evolution of derivatives has been a steady progression spanning more than a century. Some of the earliest derivatives were commodity futures traded on the Chicago Board of Trade from the middle of the nineteenth century. Equity options have also been traded for more than 100 years, although they did not make a formal debut until 1973 when the Chicago Board ...

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