A time for special FX

Dealers are beginning to think a lot more seriously about credit-adjusting the prices they quote on foreign exchange derivatives. How are they calculating this, and how are clients responding to the move? By John Ferry

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Supermarkets are often harangued for pricing alcohol so low they actually make a loss on it. The idea is that customers decide to use a particular store to buy their alcohol, but conclude they may as well do the rest of their shopping while they are there - and it is on the other products thrown into the trolley that the company makes its profit. Big supermarkets, however, are not the only entities that price some products cheaply and look elsewhere for their profits. In the face of near

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Credit risk & modelling – Special report 2021

This Risk special report provides an insight on the challenges facing banks in measuring and mitigating credit risk in the current environment, and the strategies they are deploying to adapt to a more stringent regulatory approach.

The wild world of credit models

The Covid-19 pandemic has induced a kind of schizophrenia in loan-loss models. When the pandemic hit, banks overprovisioned for credit losses on the assumption that the economy would head south. But when government stimulus packages put wads of cash in…

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