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Credit Risk To remain competitive within the global marketplace, financial institutions are looking at new ways to leverage and manage credit

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Credit Risk

To remain competitive within the global marketplace, financial institutions are looking at new ways to leverage and manage credit. Such methods include increasing risk exposure with borrowing firms and the packaging of derivatives into new products. The result, at times, opens the door for unforeseen risks and regulations. Such unknowns can have a devastating impact on financial institutions and hosting nations. The key is to ascertain the successes and weaknesses of past credit-based strategies on financial institutions. Therefore, the intent of this assignment is to target and expand upon these identified best practices.
 

Review the resources listed in the Books and Resources area below to prepare for this week's assignments.

Review the resources and research credit risk, so you will better understand the benefits and detractors of credit risk. Respond to the following points:

 

1. Evaluate the need for credit risk and current strategies for measuring and managing such a practice within financial institutions.
2. Support the value of credit derivatives for financial institutions. Please ensure you include the impacts of interest rates on derivative products.
3. Identify the positives and negatives of credit risk and how could you apply credit to your benefit?
    

Support your paper with minimum of five (5) resources. In addition to these specified resources, other appropriate scholarly resources, including older articles, may be included.
 

Length: 5-7 pages not including title and reference pages. APA Format