[...]In this article, we explore the DPCs’ approachesto risk management and the extent to which theseapproaches provide competitive advantage. We begin bycharacterizing the major intermediaries in the derivativesmarkets and describing how they manage risk. We thendiscuss the emergence of...

This article defines correlation products andexplores the problems they raise for risk management systemsin financial institutions. It explains the difficulties ofanalyzing nonseparable risk in one type of correlation product,the differential (diff) swap, and describes the much simpler...