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What is Credit Default Swap

Handbook of Research on War Policies, Strategies, and Cyber Wars
Credit default swaps are an agreement between two parties in private. One party is the buyer of protection, and the other party is the seller of protection. The protection buyer enters into this agreement to protect itself from losses that may be incurred as a result of an unexpected development in the asset it is buying protection for. It is an indicator used to determine the risk status of a country at the international level.
Published in Chapter:
The Effect of the Russian-Ukraine War on Turkey's Economy and Financial Markets
Nevzat Tetik (Inonu University, Turkey) and Ilhan Ilker Albulut (Inonu University, Turkey)
Copyright: © 2023 |Pages: 22
DOI: 10.4018/978-1-6684-6741-1.ch018
Abstract
Russia-Ukraine political relations, which have a long history, moved to a de facto dimension with Russia's invasion of Ukraine on February 24, 2022. This study focuses on the financial effects of the war's aftermath rather than its political repercussions. The authors examine the financial indicators of Turkey and interpret them in comparison with the global outlook and studies analyzing the financial effects in this process. Changes in the stock and bond markets are compared with global data to paint a picture of Turkey's exposure.
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More Results
Blockchain for Islamic Financial Services Institutions: The Case of Sukuk Financing
Credit default swap (CDS) is like an insurance against a default risk by a particular company. The company is called the reference entity and the default is called credit event. This contract takes place between two parties, called protection buyer and protection seller. Under the contract, the protection buyer is compensated for any loss originating from a credit event in a reference instrument. As a result, the protection buyer makes periodic payments to the protection seller. 3 AU50: Endnote Reference 3
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The Rise of Credit Default Swaps and Its Implications on Financial Stability
CDS is a bilateral financial contract that is used to hedge or transfer credit exposure of a reference entity. The buyer of a credit default swap receives credit protection in return for paying a periodic fee to the seller. The seller of the credit default swap collects these payments and profits if reference entity doesn’t default.
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