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In Cds We Trust - An Analysis Of Credit Default Swaps In Contract And Regulatory Law, Patrick Winfried Ladon

Patrick Ladon

This paper analyzes the utility of the credit default swap, examining its vital characteristics in contract law and within the new legal framework established after the multi-trillion dollar plunge in the credit default swaps market in 2008. While market participants tend only to measure the credit risk mitigation effects of credit default swaps, this paper provides a comparative legal review of the credit default swap, focusing on its aleatory element in the light of such traditional contract types as the gambling contract, the financial guarantee or the insurance contract. Although the advantage of credit default swaps as credit information sharing …