Question

What are the events that are considered to trigger a credit event in the market as per the International Swap and derivative Association and what is the implication of accredit event in the market?

Answer 1

a credit event is an event of bankruptcy or inability of repayment of the individual who borrowed money . The events which trigger credit events are debt restructuring, payment default, obligation default, obligation acceleration,grant of moratarium periods,repudiation, bankruptcy filing etc.

Implications of a credit event are : it put lenders in a gruesome position, they are exposed to massive risk, contractual obligations arent fulfilled, the buyer has to compensate seller.