Credit derivatives also allow financial firms to achieve a more diversified credit portfolio by acquiring credit exposure to borrowers with which they do not have a lending relationship. For example, European insurance companies reportedly have used credit derivatives to acquire exposure to European corporations that, because they rely primarily on bank lending, have little publicly traded debt outstanding.
The Federal Reserve System is committed to providing NeighborWorks and others with timely reports and information so that foreclosure-mitigation resources can be effectively targeted to local areas. For example, the Federal Reserve may map mortgage-delinquency rates in specific metropolitan areas, to help local governments and nonprofits develop and prioritize their strategies for stabilizing communities.