While credit risk transfer market dramatically increases the complexity of lender's incentive structure and above all … motivate the bank to effectively monitor in the presence of the credit risk transfer market alleviating borrower's shirking … buyer) could implicitly collude has important bankruptcy related implications. We show that when the credit derivatives …

effects on financial market function and credit provision. While the hedge fund-prime broker credit network is highly … concentrated, the average hedge fund in our sample borrows from three prime brokers and has a total credit exposure of $2 … major creditor. Such a shock results in significantly reduced borrowing due to the prime broker reducing credit supply …