Central Clearing for Credit Default Swaps - Efforts in the EU and the US to Combat Systemic Risk Through Regulation

2011 ◽  
Author(s):  
Stan Cerulus
Keyword(s):  
Systemic Risk ◽  
Credit Default Swaps ◽  
Credit Default ◽  
The Us ◽  
The Eu

Credit default swaps and systemic risk

2015 ◽  
Vol 247 (2) ◽  
pp. 523-547 ◽  
Author(s):  
Rama Cont ◽  
Andreea Minca
Keyword(s):  
Systemic Risk ◽  
Credit Default Swaps ◽  
Credit Default

The DOs and DON’Ts of credit default swaps (CDS) in the context of the EU sovereign debt crisis

2013 ◽  
Vol 15 (1) ◽  
pp. 87-104
Author(s):  
Rodrigo Olivares-Caminal ◽  
Kiriakos E Papadakis ◽  
Olga Galazoula ◽  
Ioannis Kokkoris
Keyword(s):  
Sovereign Debt ◽  
Debt Crisis ◽  
Credit Default Swaps ◽  
Sovereign Debt Crisis ◽  
Credit Default ◽  
The Eu

scholarly journals Are Credit Default Swaps Credit Default Insurances?

2014 ◽  
Vol 30 (6) ◽  
pp. 1819 ◽  
Author(s):  
Christian Schmaltz ◽  
Periklis Thivaios
Keyword(s):  
Systemic Risk ◽  
Insurance Industry ◽  
Credit Default Swaps ◽  
Economic Perspective ◽  
Insurance Contracts ◽  
Insurance Policies ◽  
Credit Default ◽  
Regulatory Perspective ◽  
Risk Potential

No, they are not. Although they exhibit similar cash flow patterns (economic perspective) this article argues that from a legal, accounting and regulatory perspective credit default swaps (CDS) are not considered to be an insurance contract. The protection buyer of a CDS is eligible to obtain the compensation without suffering any loss (and potentially realizing a gain) whereas insurance policies only pay out to compensate a loss (and not potentially realizing a gain). This disconnect between protection and exposure is the source for potential over-coverage. Furthermore, the concentrated set of reference entities and (interbank) counterparties as well as their tradeability make CDSs highly systemically significant products. Our conclusion is that CDSs are not default insurance policies. We propose to use default protection instead of credit default insurance to avoid the mislabelling. Furthermore, CDS have a substantial systemic risk potential which sharply contrasts to the limited systemic risk in the insurance industry. The legal classification of CDS as insurance contracts would have an enormous impact on the liquidity of CDS, as the ability of counterparties to issue and participate in CDS contracts would be limited.

scholarly journals Credit Default Swaps networks and systemic risk

2014 ◽  
Vol 4 (1) ◽  
Author(s):  
Michelangelo Puliga ◽  
Guido Caldarelli ◽  
Stefano Battiston
Keyword(s):  
Systemic Risk ◽  
Credit Default Swaps ◽  
Credit Default
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