Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
8954581 | Finance Research Letters | 2018 | 6 Pages |
Abstract
In a sample of European banks, we find that credit default swaps (CDS) are used for regulatory arbitrage to lower capital requirements and facilitate greater risk taking. Moreover, CDS-using banks generate higher returns on capital from the lower risk weighted assets they hold relative to banks that do not use CDS.
Related Topics
Social Sciences and Humanities
Economics, Econometrics and Finance
Economics and Econometrics
Authors
John Thornton, Caterina di Tommaso,