Pricing and Hedging of Contingent Credit Lines /

Contingent credit lines (CCLs) are widely used in bank lending and also play an important role in the functioning of short-term capital markets. Yet, their pricing and hedging has not received much attention in the finance literature. Using a financial engineering approach, the paper analyzes the st...

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Bibliographic Details
Main Author: Loukoianova, Elena
Other Authors: Neftci, Salih, Sharma, Sunil
Format: Journal
Language:English
Published: Washington, D.C. : International Monetary Fund, 2006.
Series:IMF Working Papers; Working Paper ; No. 2006/013
Online Access:Full text available on IMF
Description
Summary:Contingent credit lines (CCLs) are widely used in bank lending and also play an important role in the functioning of short-term capital markets. Yet, their pricing and hedging has not received much attention in the finance literature. Using a financial engineering approach, the paper analyzes the structure of simple CCLs, examines methods for their pricing, and discusses the problems faced in hedging CCL portfolios.
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Physical Description:1 online resource (26 pages)
Format:Mode of access: Internet
ISSN:1018-5941
Access:Electronic access restricted to authorized BRAC University faculty, staff and students