Deutsche Deploys Credit Derivatives To Hedge Forex Convertibility Risks

SINGAPORE--Deutsche Bank is using credit derivatives to manage risks arising from potential inconvertibility of certain emerging markets currencies, particularly those of Asian countries. The Asian economic crisis has increased industry concerns over convertibility risk -- the risk that a particular currency will be made inconvertible by its government, resulting in counterparty default on foreign exchange transactions in those currencies.

Troy Bowler, head of fixed income research for non-Japan