Bank Quote by Blythe Masters
“I think the most important thing to understand about credit derivatives and their use at JPMorgan is they served a number of different purposes. First and foremost, they were a tool which initially was seen as being useful in managing the bank's own risk management challenges.”
About This Quote
Source Interview: Financial Times, 2005
Credit derivatives were created to address multiple banking needs, primarily risk management, but also profit and regulatory arbitrage.
In simple terms: They serve risk, profit, and regulatory purposes.
Key Takeaway
Use them wisely, understand all functions.
Themes
finance
risk management
regulation
Mood
analytical
cautious
Type
financial
educational
When to use this quote
- bank risk assessment
- trading strategies
- regulatory compliance
Key Concepts
credit risk
financial engineering
Questions to Reflect On
- How do they balance risk and profit?
- What safeguards are needed?
A Different Perspective
Complex products can hide systemic risk.
![“We [at Soros Fund Management] use options and more exotic derivatives sparingly. We try to catch new trends early and in later stages we try to catch trend reversals. Therefore, we tend to stabilize rather than destabilize the market. We are not doing this as a public service. It is our style of…” quote by George Soros](https://sms4smile.com/quotes/img-quotes/f33/george-soros-1593_customer_we-at-soros-fund-management-use-options_113322.jpg)
