Does hedging motivate CDS trading and does that affect the availability of credit? To answer these questions we couple … relationships with riskier firms increase banks' CDS trading and hedging of these firms. Properly hedged banks holding more CDS …

This paper investigates determinants of banks' structural exposure to interest rate risk in their banking book. Using … bank-level data for German banks, we find evidence that a bank's exposure to interest rate risk depends on its presumed … optimization horizon. The longer the presumed optimization horizon is, the more the bank is exposed to interest rate risk in its …

This paper provides initial evidence on counterparty risk-mitigation activities of financial institutions on the basis … successive contracts and purchase protection written on them, even avoiding wrong-way risk mitigation. Higher stock return and … effect on the hedging behaviour against the counterparty. As the current regulatory frameworks explicitly formulate any …

in banks' dollar hedging costs. For identification, we exploit regulatory end-of-quarter reporting that penalizes banks …