Credit Derivatives & Synthetic Structures: A Guide to Instruments and Applications

by Janet M. Tavakoli

"If you want to know more about credit derivatives - and these days an increasing number of people do - then you should read this book."
Merton H. Miller, winner, Nobel Prize in Economics, 1990

Fully revised and updated
Here is the only comprehensive source that explains the various instruments in the market, their economic value, how to document trades, and more. This new edition includes enhanced treatment of U.S. and worldwide regulatory issues, and new product structures.
"If you want to know more about credit derivatives--and these days an increasing number of people do--then you should read this book."
--Merton H. Miller, winner, Nobel Prize in Economics, 1990
"Tavakoli brings extraordinary insight and clarity to this fascinating financial evolution . . ."--Carl V. Schuman, Manager, Credit Derivatives, West LB New York
Janet M. Tavakoli (Chicago, IL) is Vice President of the Chicago branch of Bank of America, where she directs the company's overall marketing of global derivatives and manages its CreditMetrics initiative.

Genres: Finance, Economics

304 pages, Hardcover

First published June 9, 1998

About the author

Finance Expert & Author

Janet Tavakoli is the founder and president of Tavakoli Structured Finance, a Chicago-based consulting firm established in 2003. Internationally recognized as a finance expert, Business Week called her the "Cassandra of Credit Derivatives" for predicting the financial crisis. This profile features her acclaimed nonfiction finance books and business expertise.

Ms. Tavakoli posts topical finance updates at her business site: Tavakoli Structured Finance.

Fiction Writing: Author Janet Tavakoli has written the well-received financial murder mystery Archangels: Rise of the Jesuits. She also writes science fiction using the pseudonym Michael K. Clancy, creating the acclaimed Zombie Apocalypse series. She posts fiction updates at: Janet Tavakoli, Science Fiction and Mystery Author.

Media Recognition: She is frequently published and quoted in financial journals including The Wall Street Journal, The Financial Times, New York Times, The Economist, Business Week, Forbes and Fortune. Television appearances include CBS's 60 Minutes, CNN, C-Span, CNBC, Fox, CBS Evening News, Bloomberg TV, and BBC.

Education: Ms. Tavakoli earned a Bachelor's degree in Chemical Engineering from the Illinois Institute of Technology and an MBA in Finance from the University of Chicago's Booth School of Business, where she served as adjunct associate professor of finance.

Books by Janet Tavakoli

Finance & Business: Credit Derivatives (John Wiley & Sons, 1998, 2001, 2022)

Structured Finance & Collateralized Debt Obligations (John Wiley & Sons, 2003, 2008): an exposé of grave flaws in the structure, sales practices, and methodology for rating structured financial products.

Dear Mr. Buffett: What an Investor Learns 1,269 Miles from Wall Street (John Wiley & Sons, 2009): the causes of the greatest credit bubble in the history of the world, how we could have avoided it and how we can prevent it from happening again.

The New Robber Barons (2012): Janet Tavakoli's ongoing chronicle of the global financial crisis captured in her articles from the September 2008 meltdown through February 2012.

Nonfiction: Decisions: Life and Death on Wall Street: Janet Tavakoli's nonfiction account of Wall Street skullduggery.

Unveiled Threat: A Personal Experience of Fundamentalist Islam and the Roots of Terrorism: Janet Tavakoli's autobiographical account.

Fiction: Archangels: Rise of the Jesuits: Janet Tavakoli's financial fiction thriller debut.

Reviews

[May Ling]

I realized half way through that it was my second time reading this book. Still, my understanding in the past was so poor, that the second read was thoroughly enlightening. Tavakoli does an impressive job in making the Credit Derivatives market accessible to laymen. She expertly describes the nature, usage, terms, as well as their regulatory inspiration and their flaws.



I found it very helpful that she included examples of instruments that exist, though they make questionable sense. It really does prove the degree to which ignorance exists despite a well-traded liquid market.



Her incorporation of Basel regulation issues and differences between countries is particularly salient in today's market turmoil. Off-balance sheet transactions and the potential difficulties in monitoring them are at the heart of what is happening today.



I have a feeling, though, that should Tavakoli choose to add another chapter, the current environment would be rife with material. She comes very close to discussing the problems in correlation, and hints at much of what has become the nightmare of banks today. Similarly, you see her discuss the issues with mark to market and the problems given different counter-parties. I'd be intrigued to see what she might have to say in the most recent period.