Watch the indices! Derivatives and the Eurozone sovereign debt crisis

Anne-Laure Delatte, Julien Fouquau, Richard Portes, 17 April 2014

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The job of government bond analysts has been tough since the Eurozone crisis started. They’ve had to tell their clients a story behind every single bond spread hike since the fall of 2009. The list includes concerns over peripheral sovereigns’ public finances, deterioration of the fundamentals, financial sector credit risk, and European institutional coordination failures.

Topics: Financial markets, Global crisis
Tags: Credit Default Swaps, Eurozone crisis

The transmission of Federal Reserve tapering news to emerging financial markets

Joshua Aizenman, Mahir Binici, Michael M Hutchison, 4 April 2014

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The quantitative easing (QE) policies of the US Federal Reserve in the years following the crisis of 2008–2009 included monthly securities purchases of long-term Treasury bonds and mortgage-backed securities totalling $85 billion in 2013. The cumulative outcome of these policies has been an unprecedented increase of the monetary base, mitigating the deflationary pressure of the crisis.

Topics: Exchange rates, International finance, Monetary policy
Tags: asset prices, Credit Default Swaps, emerging markets, exchange rates, Federal Reserve, stock markets, tapering

A first look at the structure and dynamics of the UK credit default swap (CDS) market

Evangelos Benos, Anne Wetherilt, Filip Zikes, 2 December 2013

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The financial crisis of 2007–08 gave rise to widespread concerns that over-the-counter derivatives contributed to the build-up of systemic risk. As such, regulators have been quick to request and gain access to more information about activity in these markets.

Topics: Financial markets
Tags: Credit Default Swaps, derivatives markets, over-the-counter derivatives

The European ban on naked sovereign credit default swaps: A fake good idea

Anne-Laure Delatte, 23 July 2012

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The European debt crisis has raised concerns regarding the use of credit default swaps (CDSs). CDSs are a derivative financial product used to hedge against the default risk of any entity. From the outset, it has been suspected that the crisis has been exacerbated by a few investors driving up the prices in the CDS market.

Topics: EU institutions, Financial markets
Tags: Credit Default Swaps, EU regulation, over-the-counter derivatives

Credit default swaps: Useful, misleading, dangerous?

Richard Portes, 30 April 2012

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Topics: Global governance, International finance
Tags: Credit Default Swaps, financial regulation

Economic consequences of speculative side bets: The case of naked CDS

Yeon-Koo Che, Rajiv Sethi, 4 September 2010

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There is arguably no class of financial transactions that has attracted more impassioned commentary over the past couple of years than naked credit default swaps. Robert Waldmann has equated such contracts with financial arson, Wolfgang Münchau with bank robberies, and Yves Smith with casino gambling.

Topics: Financial markets, Global crisis
Tags: Credit Default Swaps, financial regulation, global crisis

Stormy Weather in the Credit Default Swap Market

Mathieu Gex , Virginie Coudert , 13 October 2008

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Are credit derivatives markets particularly prone to speculation and contagion? The answer is certainly yes if we take a look at the credit default swaps (CDSs), which are the most widely traded credit derivatives.

Topics: Financial markets
Tags: Credit Default Swaps, financial meltdown

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