As a result, loans are priced better to reflect their varying levels of risk, they are syndicated and securitized to mitigate lenders’ risk, and credit derivatives have been created to limit credit-risk exposures that are retained. On that last topic, I would be remiss not to draw your attention to a recent consultative paper on credit-risk transfer issued by the Joint Forum in October.
This consultative paper focuses on credit derivatives and related transactions - themselves an outgrowth of better risk measurement - and is open to public comment through January 2005.