Credit Derivatives: Systemic Risks and Policy Options?

@article{Elliott2009CreditDS,
  title={Credit Derivatives: Systemic Risks and Policy Options?},
  author={Jennifer E. Elliott and John S. Kiff and Elias G. Kazarian and Jodi Scarlata and Carolyne Spackman},
  journal={Monetary Economics eJournal},
  year={2009}
}
Credit derivative markets are largely unregulated, but calls are increasingly being made for changes to this "hands off" stance, amidst concerns that they helped to fuel the current financial crisis, or that they could be a cause of the next one. The purpose of this paper is to address two basic questions: (i) do credit derivative markets increase systemic risk; and (ii) should they be regulated more closely, and if so, how and to what extent? The paper begins with a basic description of credit… 

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