This article analyzes the impact of credit risk transfer on banks' screening incentives on the primary loan market …. While credit derivatives allow banks to transfer risk to investors, they negatively a ffect the incentive to screen due to … standardized credit derivatives that fully transfer the underlying loan default risk. In particular, a callable credit default swap …

behavior and risk sensitivity of a risk-neutral bank. The bank is exposed to credit risk and may use credit default swaps (CDS … trading is found to interact with the former effect when regulation accepts CDS as an instrument to mitigate credit risk … exposure to credit risk conditional on the CDS price being downward biased, unbiased or upward biased. This interaction …

interaction between capital adequacy regulation and credit risk transfer with credit default swaps (CDS) including its effect on … lending behavior and risk sensitivity of a risk-neutral bank. CDS contracts may be used to hedge a bank's credit risk exposure … credit risk. Under the substitution approach in Basel II (and III) a risk-neutral bank will over-, fully or under-hedge its …

interaction between capital adequacy regulation and credit risk transfer with credit default swaps (CDS) including its effect on … lending behavior and risk sensitivity of a risk-neutral bank. CDS contracts may be used to hedge a bank's credit risk exposure … credit risk. Under the substitution approach in Basel II (and III) a risk-neutral bank will over-, fully or under-hedge its …

interaction between capital adequacy regulation and credit risk transfer with credit default swaps (CDS) including its effect on … lending behavior and risk sensitivity of a risk-neutral bank. CDS contracts may be used to hedge a bank’s credit risk exposure … credit risk. Under the substitution approach in Basel II (and III) a risk-neutral bank will over-, fully or under-hedge its …

We study how adverse selection distorts equilibrium investment allocations in a Walrasian credit market with two … externalities and change equilibrium distortions. Implications for empirical design in credit market studies and financial stability …