This scalability was magnified by the use of credit default swaps (CDSs), which offered phony insurance against default.

Second, banks would also suffer because they had sold insurance against default in the form of credit default swaps.

Credit Default Swaps on Trial

That was also true of credit default swaps, which became an instrument of speculation instead of insurance and reached an astounding 62 trillion in volume.

This was deemed a credit event, so credit default swaps were exercised anyone who insured against default had to pay out.

Credit default swaps (CDS) are particularly suspicious instruments.

They are supposed to provide insurance against default to bondholders.

Currencies fell, interest rates rose, and credit default swaps soared.

What started with subprime mortgages spread to all collateralized debt obligations, endangered municipal and mortgage insurance and reinsurance companies and threatened to unravel the multi trillion dollar credit default swap market.

Such insurance already exists on a small scale in the form of credit insurance against unemployment.

Some derivatives, particularly credit default swaps should not be traded at all.

That s why market interest rates on privately held Greek bonds and prices for credit default swaps indicate that a massive default is coming.

Socialization of bank debt across borders implies that a country s private borrowing costs are artificially reduced below market rates, as insurance (in the form of credit default swaps) is provided free of charge by other countries.

A credit information centre and an insurance communication platform have been created.

The reason is simple a government default would destroy the credit system as we know it.

If investors in derivatives, repos, and credit default swaps lacked favored treatment, they would behave differently.

Innovative financial instruments such as derivatives and credit default swaps enabled the distribution of risk throughout the economy.

She has no insurance against erratic weather patterns, gets no subsidies, and has no access to credit.

The gaps between German bond yields and Italian and Greek yields are at record levels. The price of default insurance has tripled.

Clinton also refused to regulate credit default swaps, and the US Securities and Exchange Commission allowed banks to triple their leverage.

Then there are various derivatives, such as credit default swaps, through which banks holding Greek debt have insured themselves against non payment.

The EXIM Bank provides credits to overseas investments through the Overseas Investment Facility, and an Overseas Investment Insurance scheme is run by the Malaysia Export Credit Insurance Berhad to cover political risks.

As a result, the market for credit default swaps (CDS) where protection against corporate defaults is bought and sold may also experience massive losses.

Its banks and financial institutions were not tempted to buy the mortgage supported securities and credit default swaps that ruined several Western financial institutions.

A Greek default would threaten to sink them, too, for it would raise immediate concerns about the solvency of Europe s systemically important banks and insurance companies.

The seller made the sale conditional to the acceptance of the buyer by the defendant's credit insurance, which did not occur.

The mortgage crisis and the credit crunch have led to bailouts for the banks and the nationalization of housing finance and insurance.

Insurance companies and pension funds, on the other hand, have limited capacity for credit risk, but more for market and liquidity risks.

If everyone expects that a credit rating downgrade will make Italian debt unsustainable, Italy will indeed default after a downgrade, regardless of the downgrade s real economic effects.

The goal should be to make self insurance unnecessary by guaranteeing access to international credit lines in case of abrupt outflows of private capital.

Institutional capacity was strengthened by the establishment of an independent tax and customs review board, a credit information centre and an insurance communication platform.

Activities include insurance and annuities, life insurance, retirement insurance, health insurance, and property casualty insurance.

The need for such build up would lessen if the IMF develops into an insurance type of institution that has SDR credit lines readily available.

Has this name been circulated to non banking financial institutions, i.e., pension, insurance and financial leasing companies, foreign exchange bureaus, securities firms and credit unions?

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Surely there is at least as much natural demand for commodity bonds as there is for credit default swaps and some of the bizarrely complicated derivatives that are currently traded!

As part of an overhaul of the Fund s lending facilities, we introduced the Flexible Credit Line (FCL), a pre emptive insurance facility for members with strong policies.

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Sovereign cocos have the advantage that their activation would not constitute a credit event triggering the credit default swaps written on the bonds. The existence of large quantities of CDS, together with uncertainty about who has written them, has fed the reluctance to proceed with restructuring.

On December 19, the cost of credit default swaps to insure the debt of Ford was 68 percent the sum insured for five years in addition to annual payments of 5 percent.

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