Derivatives Developments: Tackling the $50 Trillion Credit Default Swap Market and Beyond

December 30, 2008
The emergence of credit default swaps as a source of systemic risk has spurred action in the federal, state, and private sectors. Federal regulators acting through the President’s Working Group on Financial Markets have announced major initiatives, multiple congressional hearings have been held, several bills have been introduced that would provide greater oversight of over-the-counter derivatives, and the New York State Commissioner of Insurance has issued guidelines (since deferred) intended for naked credit default swaps. This update reviews these developments and other related matters.