Banks can transfer credit risk to other investors or financial institutions through credit default swaps (CDS). CDS is a financial derivative, which allows banks to get compensation in the event of credit events, such as debt default. This risk transfer mechanism is helpful to reduce the credit risk cost faced by banks. By purchasing CDS, banks can get insurance, and once the debt defaults, they can get compensation and reduce potential losses. CDS also provides hedging and hedging tools for investors, enabling them to manage their credit risks. This risk transfer mechanism plays an important role in the financial market and improves the liquidity and stability of the market.