Credit Default Swaps and the Credit Crisis

  title={Credit Default Swaps and the Credit Crisis},
  author={Ren{\'e} M. Stulz},
  • René M. Stulz
  • Published 2009
  • Economics
  • Derivatives
  • Many observers have argued that credit default swaps contributed significantly to the credit crisis. Of particular concern to these observers are that credit default swaps trade in the largely unregulated over-the-counter market as bilateral contracts involving counterparty risk and that they facilitate speculation involving negative views of a firm's financial strength. Some observers have suggested that credit default swaps would not have made the crisis worse had they been traded on… CONTINUE READING
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