The global financial crisis focused attention on risks beyond 'simple' measures of credit exposure. Among many other issues, the crisis highlighted the problem of counterparty credit risk (CCR) when the demise of an institution causes losses in financial instruments where the credit of the counterparty is not referenced directly. In particular, the linkages between derivatives counterparties and the associated credit risks were at the root of concerns over the collapse of Lehman Brothers and the bailout of AIG. This course analyses how CCR is generated within financial markets and shows how the scale of exposure can be initially assessed.
This online course forms part of the Intuition short course suite.