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Web: www.barbicanconsulting.co.uk
This credit derivatives training course is designed for people who would like to know more about the main credit derivative products. This includes what they are, how they work, how the bank uses them and the key terms to a transaction. The course is an introduction and prior knowledge of credit products is not required.
The workshop will provide you with an introduction to:
Training will be in a workshop format. This will include a mixture of presentation and case study material. The course is designed for up to ten staff. Below is a summary. The content has been placed in a logical sequence and addresses the main issues.
Credit Derivatives
Credit Default Swaps, (CDS)
Case study: Comparing funded and unfunded transactions
CDS Documentation
Case study: Understanding the confirmation
What happens if you experience a Credit Event
Credit Indices
Case study: Calculating the settlement amount on an Itrax trade
CDS & Bond Prices
CDS and bond prices are closely related but may not be identical. You will find out how bond spreads and CDS prices can be compared and why they can differ. This will include reasons why the prices change.
Case study: Explaining how CDS prices will alter given particular market events
Valuation of CDS
Case study: Simple valuation of a CDS trade
Trades Using CDS, (Brief overview)
Case study: Understanding the risk and return on a CDS trade
Operational Risks
25th March 2017
Derivatives are traditionally valued by taking the expected future cash flows and then discounting them in accordance with interest rates to give today’s value (present value). Implicit is the assumption that the derivative contract will run to its contractual date and all the cash flows will be paid and received. However, in the real world this may not occur. The counterparty may default.
25th March 2017
The Treasury function has several roles. At the highest level these include hedging and trading. The risks that are incurred are • Market risk (Interest rate & foreign exchange risk) • Liquidity risk • Operational risk • Credit risk What sort of things create credit exposures?