Credit Mitigation, Securitisation, Credit Derivatives and Cases

Credit Mitigation, Securitisation, Credit Derivatives and Cases - Article

This article explains how banks mitigate or transfer credit risk through collateral, guarantees, netting, securitisation and credit derivatives. Through practical cases, it shows how these techniques affect default exposure, recovery and portfolio concentration while creating residual risks such as guarantor, counterparty, legal and basis risk. It helps CAIIB BFM learners distinguish genuine risk reduction from merely shifting risk elsewhere.