comments

Complex financial instruments that few understood

The increasing complexity of Credit Default Swaps meant that very few people (and particularly the regulators) fully understood what was happening.

RELATED ARTICLESExplain
⌅
The Global Financial Crisis
⌃
Immediate triggers of the financial crisis?
⌃
Pathology in the Credit Default Swaps market
■
Complex financial instruments that few understood
↳
Complexity means many decisions driven by computer algorithms
↳
Credit-rating agencies underestimated risks
⇤
Congress missed opportunity to regulate Credit Default Swaps in 2000
□
CDS market complex, unregulated and secretive
□
Credit default swaps became divorced from underlying value
□
Hedging/Netting contracts created web of vulnerability
□
Monoline insurers struggling to meet guarantees
□
Reckless securitisation on top of reckless lending
□
Resources of regulators limited in comparsion to market players
□
Speculative swaps grew to dwarf real insurance swaps
□
Vast scale of rewards encouraged complicity with system
□
Graph of this discussion
Enter the title of your article


Enter a short (max 500 characters) summation of your article
Enter the main body of your article
Lock
+Comments (0)
+Citations (0)
+About
Enter comment

Select article text to quote
welcome text

First name   Last name 

Email

Skip