Hedging/Netting contracts created web of vulnerability
The practice of hedging/netting contracts between the different players in the system means that the whole system becomes potentially vulnerable to a break down in the ability to pay anywhere in the system.
Immediately related elementsHow this works
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The Global Financial Crisis »The Global Financial Crisis
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Immediate triggers of the financial crisis? »Immediate triggers of the financial crisis?
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Pathology in the Credit Default Swaps market »Pathology in the Credit Default Swaps market
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Hedging/Netting contracts created web of vulnerability
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