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Hedges in the warehouse: the banks get trimmed


Abstract: When banks ?warehouse? loans, that is, hold them temporarily before selling them through securitizations, how do they protect themselves against credit risk? This article examines the effectiveness of hedging strategies in the context of the recent heavy losses in financial markets.

Keywords: Securities; Hedging (Finance);

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Provider: Federal Reserve Bank of Chicago

Part of Series: Chicago Fed Letter

Publication Date: 2008

Issue: Apr

Order Number: 249