Journal Article

Credit default swaps and their market function


Abstract: Credit derivative instruments allow default risk to be segregated from debt of all kinds. They have granted investors the ability to hedge their portfolios and provided numerous institutions with a new source of income. However, the market for credit default swaps is neither transparent nor regulated, perhaps undermining the stability of the financial system it has helped innovate.

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Provider: Federal Reserve Bank of Cleveland

Part of Series: Economic Commentary

Publication Date: 2009

Issue: Jul

Order Number: 1