Structure Credit Products And Implementation

The credit derivative market as one of today's fastest growing investment market absorbs many financial institutions to enter this market. At current the main credit derivatives market is in US and European, but the demands of Chinese market increase rapidly because China will open its financial market for the foreigners according WTO and the Chinese financial market will risky than ever before. So the development of Credit derivatives in China is very important. Now there are many essays that talked about financial derivatives but not much about the credit derivatives. According this situation author writes this paper to talk about the credit derivatives to give the Chinese commercial bank some indications to how to use the credit derivatives in Chinese financial market. The credit risk is one of the main financial risks, so knowing well about the credit derivatives is very important to Chinese financial institutions.The contents of this essay are as follows: First, introduce the history and current situation about the global credit derivative market and especially the market in Asia. It gave the readers some ideas about the fast growing market situation in the recent 20 years and also introduces the main kinds of credit derivatives in the current market and the main institutions who use the credit derivatives. Second, introduce the credit derivatives pricing model (Melton Model) and how to use this model to price the credit derivatives. Then talk about the Monte Carlo Simulation and how to use it to estimate the...