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Guilty By Association? Regulating Credit Default Swaps, Houman B. Shadab
Guilty By Association? Regulating Credit Default Swaps, Houman B. Shadab
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A wide range of U.S. policymakers initiated a series of actions in 2008 and 2009 to bring greater regulation and oversight to credit default swaps (CDSs) and other over-the-counter derivatives. The policymakers’ stated motivations echoed widely expressed criticisms of the regulation, characteristics, and practices of the CDS market, and focused on the risks of the instruments and the lack of public transparency over their utilization and execution. Certainly, the misuse of certain CDSs enabled mortgage-related security risk to become overconcentrated in some financial institutions.
Yet as the analysis in this Article suggests, failing to distinguish between CDS derivatives and the …