Swap and other structured products: Critical review of recent development as tool in financial risk management applications
Frédérik Arns / Franklin Schram
Seminar paper from the year 2006 in the subject Business economics - Banking, Stock Exchanges, Insurance, Accounting, grade: A+, University of Westminster, course: Financial Derivatives, language: English, abstract: The increased volatility in the financial products world has raised concern about new
possibilities of Risk Management leading into increased use of structured products. Credit
derivatives are financial instruments to manage risk. They isolate such risk from the
underlying financial asset. This essay, firstly, is going to examine
the impact on swap products as a tool in Risk Management followed by an examination of
key areas in structured products development that have experienced the strongest growth in
the last decade. For both types, the current theory and pricing will be outlined
followed by a demonstration of some characteristic applications in Financial Risk
Management.
