The only alternative for LTC writers who want to shrink their existing exposures and reinsure their business is to go to lower or non-rated reinsurers, bringing its own risks, specifically,
counterparty risk.
In March 2017, the SECC capped the number of central
counterparty licences at four, claiming that was a sufficient number in order to satisfy current demand.
CHANGE IN
COUNTERPARTY RATINGS: The long-term rating on the Indiana Bond Bank gas revenue bonds will continue to be determined by Fitch's assessment of the transaction structure, the role of each
counterparty in the structure and their credit quality.
Moody's added that after it applied its "advanced loss given failure analysis" to determine the
counterparty risk assessment, "the cushion provided to obligations captured by the
counterparty risk assessment bymore junior liabilities accounts for around 19 per cent of RCB Bank's tangibleassets".
Therefore, a
counterparty cannot assume that a Kuwaiti
counterparty's entry into an ISDA transaction is in the ordinary course of its business.
Thus, Moody's CR Assessment is an opinion of the
counterparty risk related to a bank's covered bonds, contractual performance obligations (servicing), derivatives (e.g., swaps), letters of credit, guarantees and liquidity facilities.
- Short Term
Counterparty Risk Assessment: Prime-2 (cr)
"We affirmed the long- and short-term
counterparty credit ratings and maintained a stable outlook on ForteBank JSC (formerly known as Alliance Bank JSC), KazInvestBank, and Kazakh Agrarian Credit Corp.
Intended for researchers and graduate students in financial mathematics, this volume offers "an analytical basis for the quantitative methodology of dynamic valuation, mitigation and hedging of bilateral
counterparty risk on OTC derivative contracts under funding constraints" (from the preface).
Acharya and Bisin (2014) emphasize that the risk that one's
counterparty will not fulfill its obligation needs to be evaluated at the time a CDS is contracted.
Central Counterparties (CCPs) have played an integral role in reducing
counterparty risk over the past few decades by guaranteeing the settlement of trades on exchanges.