We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.
Nobody downloaded yet

The Credit Default Swap of Central East European Countries - Essay Example

Comments (0)
Summary
The research dissertation is on the topic of examining the difference in risk premium spread in the funding rate, reflected in the Credit Default Swap (CDS) of Central East European (CEE) countries which have currency board restriction such as nations like Bulgaria…
Download full paper
GRAB THE BEST PAPER
The Credit Default Swap of Central East European Countries
Read TextPreview

Extract of sample
The Credit Default Swap of Central East European Countries

Download file to see previous pages... The risk in entailment of equity investment is high in Central European countries compared to Countries of Western Europe and this is mainly due to factors such as the weak rule of the governments, difficult and complicated financial accounts of organizations, currency risks, the transparent rule in government institutions etc. Economic performance of each country is unique and therefore equity risk premium is different for each country.The currency board is the controller of interest rates and provides financial stability to the country.
The CDS premium is a powerful instrument in the credit derivatives market because it is a direct tool for measuring the credit default spreads. CDS spreads is in proportion to the pure valuation of defaulting risk of the primary body. Credit risk is tested by approximating the equity price and the volatility jumps in the financial market. CDS spread commonly referred is the premium payment for a CDS. Credit Default Swap spreads is a yardstick for pricing and hedging insecurities. “Risk premiums for Central Europe have increased substantially over the past two years and may well come down again when confidence returns to global financial markets. This may represent an excellent buying opportunity, as risk premiums tend to rise or even overshoot during turbulent financial markets.” (Nemethy 2009).
The main objective of this dissertation is to examine the differences in the risk premium reflected in the CDS of CEE countries, especially Bulgaria. Bulgaria has a currency board restriction. Countries which have a currency board restrictions faceless degree of inflation and experience more GDP growth. The idea of this dissertation is to convince that risk premiums in CDS have an impact on the economy and has differences in the risk premium. Credit default swaps are an indicator of global financial crisis. ...Download file to see next pagesRead More
Comments (0)
Click to create a comment or rate a document
CHECK THESE SAMPLES - THEY ALSO FIT YOUR TOPIC
A Credit Default Swap (CDS)
A Credit Default Swap (CDS) is a monetary swap agreement between parties designed to shift the credit exposure of unchanging income products (Choudhry, 2006). The agreement facilitates the lender or creditor to transfer credit from a third party to an insurer who agrees to insure the risk of default payment of credit.
9 Pages(2250 words)Coursework
European Central Bank
A rise in the European Central Bank’s targeted inflation rates according to the German government this year. Due to increased holiday accommodation and travel and tourism costs, a 2.3% increase was witnessed in the Consumer Price Index which has led the government to undertake sharp steps such as decreasing the cutting down on interest rates.
4 Pages(1000 words)Essay
The Role of the Derivatives in Credit Default
Due to their flexibility, derivatives allow the investor to explore a full range of investment strategies. This includes hedging, speculation and arbitrage. In addition to this, derivatives offer sophisticated management of risk. They allow for gearing or what is known as leverage.
3 Pages(750 words)Essay
Credit-Default Swaps and the Fate of AIG
The Nature of the Credit Default Swap CDS refers to the process of a buyer paying consecutively to a retailer of merchandise to have his protection from the predicted fall in sales of a credit mechanism like the credit bonds of an institution. When credit mechanism occurs to an institution, the purchaser of the mechanism has the sole security of the making sure the bonds are security of the seller is retained.
3 Pages(750 words)Essay
European Central Bank Essay
The reaction of the markets to this step of ECB was hardly typical as the shares prices rose and euro declined against the dollar within several days after announcement about the rising of the interest rates had been made (However, the reaction of American markets was more typical one as the Dow Jones Stock Index of 600 major European companies fell by 2 points within the several days after the announcement had been made).
4 Pages(1000 words)Essay
The European Central Bank
It has its headquarters in Frankfurt, Germany. (ECB, n.d.) ECB's main objective is to maintain euro's price stability to keep inflation rate below 2% per year. According to the ECB website, its tasks include: defining and maintaining monetary policy of the euro area; ensuring that the foreign exchange operations remain consistent with the aims of the central bank's monetary policy; promoting smooth operation of payment systems; and holding and managing foreign reserves.
5 Pages(1250 words)Essay
European Central Bank
The bank is located in Frankfurt, Germany and was established in 1998. It was set up by the European Union and it effectively replaced the European Monetary Institute. But the design and importance of the central bank can be seen as accruing directly from the Germany Bundesbank.
9 Pages(2250 words)Essay
The Main Problems which Eastern/Central European Countries Have
In this paper the countries under examination are divided into three categories: former Soviet Union (FSU) countries, Central European and the Balkan countries. Each group had faced different economic challenges, as some of them were an active members of the Soviet Union, while others were under a different level of influence from the Union.
6 Pages(1500 words)Essay
East European Jews
The Jewish community including the Eastern European group was subject to hatred crimes throughout their American history. The first Jewish settlers arrived on the shores of America in
4 Pages(1000 words)Essay
East and Central European countries
countries for which this model of development has become a fait accompli today demonstrate a high level of competitiveness of their economies, allowing them to maintain strong positions in global markets technology products and services and receive huge income. The worlds
8 Pages(2000 words)Essay
Let us find you another Essay on topic The Credit Default Swap of Central East European Countries for FREE!
Contact us:
+16312120006
Contact Us Now
FREE Mobile Apps:
  • About StudentShare
  • Testimonials
  • FAQ
  • Blog
  • Free Essays
  • New Essays
  • Essays
  • The Newest Essay Topics
  • Index samples by all dates
Join us:
Contact Us