Traders in bonds and credit default swaps are bombarded with information on the default probabilities implied by credit spreads using a simple ratio. This ratio predicts that the credit spread will be ...

Learn how the Advanced Internal Rating-Based (AIRB) approach helps financial institutions internally assess credit risk using ...

A major advancement in risk management among large financial institutions has been the development of internal risk models. The models encompass institutions’ procedures and techniques for assessing ...

Structural models of default are widely used to analyze corporate bond spreads, but have generally been unable to explain why risk premiums are as high as they are. This credit spread puzzle can be ...

Lenders use some common measures to predict how risky a borrower might be Chip Stapleton is a Series 7 and Series 66 license holder, CFA Level 1 exam holder, and currently holds a Life, Accident, and ...

In another sign that the U.S. economy is headed for a rough landing, leveraged loans’ and high yield bonds’ probability of default and actual defaults continue to rise. Market signals, as well as ...

How do you manage credit and counterparty risk in this volatile and uncertain environment? That’s the question on every risk manager’s mind, as bankruptcies from COVID-19 and the subsequent economic ...

The credit quality of an entity is essential information that reflects that entity’s financial health and its ability to meet debt obligations. Credit quality can be expressed as a credit score, but ...

Over the last week, Treasury 2-year yields moved to 4.27% this week from 4.29% last week. At 10 years, this week’s yield is 4.63%, compared with 4.6% last week. As a result, the current 2-year/10-year ...