Grosen, Anders; Jessen, Pernille; Kokholm, Thomas - In: Journal of Economics and Finance 38 (2014) 4, pp. 568-588
We examine a specific portfolio credit derivative, an Asset Protection Scheme (APS), and its applicability as a discretionary regulatory tool to reduce asymmetric information and help restore the capital base of troubled banks. The APS can be a fair-valued contract with an appropriate structure...