Credit Risk Dominance

Credit Risk Dominance is one of the qualitative criteria of Hedge Effectiveness. This criteria tests if there is the effect of credit risk which dominates the value changes that result from the economic relationship between the hedged item and hedging instrument. This is tested in the form of a questionnaire which is divided into two sections as Logic Based questions and Generic questions.

The criteria for Credit Risk Dominance to be effective is detailed in the Criteria for Credit Risk Dominance to be Effective Appendix.