Learning Curve

In this Learning Curve we describe the latest developments in credit derivative-based synthetic funding structures, which are now being used for liquidity and balance sheet asset-liability management by banks and other financial institutions.

A range structure accrues value when a reference index fixes inside a specific range during a pre-defined period.

The synthetic collateralized debt obligation is well-established as a vehicle used to facilitate balance sheet capital management, credit risk transfer and credit trading.

This week's Learning Curve focuses on non-deliverable options and the potential of the Chinese derivatives market.

Few issues have attracted as much attention worldwide as the Chinese yuan (CNY) or renminbi (RMB) has done in the past two years.

The Japanese credit-default swap market, as with many credit markets, has grown rapidly over the past five years.

Project finance or long-term rental agreements often involve fees that are fixed at a certain real level over the life of the trade: the annual payment is a fixed amount adjusted by the cumulative inflation since trade inception.

This week's Learning Curve deals with the types of market participant, geographic variations and two of the most popular instruments: zero-coupon swaps and year-on-year swaps.

An attractive feature of the EC-Hedge (equity-credit hedge) model is its ability to use equity implied volatility as an input data.

Strategies involving both equity and credit products have become increasingly popular, under the pressure of both an overall decrease in market volatility and structural changes among alternative investment strategies.

Last week's article gave a general introduction into Regulation SHO and looked at a pilot program suspending a price test for specified securities and the uniform locate requirement.

The Securities and Exchange Commission published Regulation SHO on July 28.