This book outlines the key ingredients of fit for purpose business models for Active Credit Portfolio Management. Ever more important regulatory and accounting aspects of hedging are discussed and solutions provided for the accounting mismatch arising from hedging loans with credit derivatives. The author delves deep into the mechanics of Credit Default Swaps, using case studies such as the Greek default event to uncover built in flaws of this most frequently used product for credit risk mitigation. Other hedge instruments and strategies, including sub-participations, swaptions, baskets, tranches, and macro hedges, are explained in detail. The book concludes with a very topical discussion on bank regulatory capital optimization through credit risk transfer techniques.