Bond Failures Boost Hedging Tool

The video discusses the rise in defaults in China due to the government's deleveraging campaign, leading to a record 66 billion yuan in defaults. Investors are using credit risk mitigation warrants, similar to credit default swaps, to cope with these defaults. The video explains the differences between these instruments, highlighting the focus on the underlying instrument in mitigation warrants and the transparency in their pricing process. The market outlook is positive, with the PBOC supporting financial institutions to encourage these instruments as Beijing moves away from bailing out companies.

How have investors adapted to the rising defaults in China?

Why are credit risk mitigation warrants becoming popular again?

What are the main differences between credit default swaps and credit risk mitigation warrants?

What is the current market outlook for credit risk mitigation instruments in China?

What role does the PBOC play in supporting financial institutions regarding these instruments?