📚 noun • entry_id 49941
credit default swap
Meanings (ES + gloss)
permuta de incumplimiento crediticio • swap de incumplimiento crediticio
A credit derivative contract between two counterparties, whereby the buyer (seller of risk) makes periodic payments to the seller (buyer of risk) in exchange for the right to a payoff if there is a default or other credit event in respect of a third party called reference entity.
The cost of that funding is partially influenced by the price of an instrument known as a credit default swap — essentially, a form of insurance that one party buys to protect agai…
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