Credit Default Swap,
Credit Default Swap means,
An agreement in which the buyer of an exchange pays one or more of a series of payments in exchange that if a particular credit instrument, such as a bond or loan, defaults, the buyer will receive a certain amount from the seller. This is because the exchange seller guarantees that if the bond (subject to credit swap) defaults, the seller will pay the buyer cash. Many credit default exchanges were bought / sold in the mid-2000s with subprime mortgage-backed securities. Owner of property to be insured. In contrast, the buyer of a credit swap does not need to own the financial instrument for which the exchange provides financial security. Thus, a credit swap allows speculation (by the buyer) whether a particular credit instrument will default. Another major difference for insurers is that, unlike insurers, sellers of credit default swaps do not need to have a special reserve in case of default. The affected instrument (for example, mortgaged securities) and the seller will have to pay a credit swap to the buyer. In 2008, AIG Insurance's failure to maintain adequate reserves for its multibillion-dollar credit default exchange was a major reason for the company's near-collapse.
Credit Default Swap can be defined as, A credit swap (CDS) is a financial or derivative agreement that allows an investor to exchange or offset their credit risk with another investor. For example, if a lender fears that a lender will default on a loan, the lender can use CDS to meet that risk or negotiate. To negotiate default risk, lenders purchase CDS from other investors who agree to repay the lender if the lender defaults. Most CDS require ongoing premium payments to maintain the contract, similar to an insurance policy.
Literal Meanings of Credit Default Swap
Meanings of Credit:
Recognize someone openly as a production participant (some published or broadcast)
Add (an amount of money) to the account.
Belief (something surprising or impossible)
The customer's ability to receive goods or services before payment is based on the belief that payment will be made in the future.
An entry that records the amount received, listed on the right or in the Accounts column.
Public acknowledgment or praise
Confirmation of completion of the course or activity by the student, which will be submitted to the school register in the registered title or diploma.
Sentences of Credit
The script is attributed to an American author and two Japanese authors.
This late tax can be deposited in the income statement.
You may not believe it but it is true.
The column must be included and the debit amount must be equal to the credit amount.
The president claims all the success for himself.
Cicero's abstract philosophy lost its popularity.
Synonyms of Credit
reliability, attribute, acclaim, merit, admiration, assign, tributes, have faith in, credibility, hat tip, adulation, credit, count on, accredit, depend on, accept, veneration, financial status, praise, regard, ascribe, rely on, plausibility, financial standing, have confidence in
Meanings of Default:
Failure to meet obligations such as: B. Repayment of debts or appearing in court.
A pre-selected option taken by a computer program or other mechanism if no alternative is specified by the user or programmer.
Failure to meet obligations, such as B. Repay the loan or appear in court.
Returns automatically (via computer program or other mechanism) (pre-selected option)
Sentences of Default
You need to restructure your loan to avoid default.
Some defaulters on student loans
When you start a new card, the system uses its own style by default.
Synonyms of Default
renege, backtrack, non-remittance, non-payment, failure to pay, revert, back out, not pay, fail to pay, fail to honour, backslide
Meanings of Swap:
Take part in the exchange.
The process of exchanging one thing for another.
Sentences of Swap
We exchange our phone numbers.
Synonyms of Swap
exchange, barter, trade-off, reciprocate, substitution, trade, give and take, switch, pass back and forth, interchange, bandy