Wednesday, February 24, 2010

More Than a Year Post-Financial Crisis and...

Credit default swaps are still being written, bought and traded. Why this has been allowed to continue (rather than regulating CDS' as the insurance that they are) is beyond me. Apparently, it's beyond regulators too. To me, this seems like it should be a simple fix.

A pithy description of the role some banks are playing is: “It’s like buying fire insurance on your neighbor’s house — you create an incentive to burn down the house,” said Philip Gisdakis, head of credit strategy at UniCredit in Munich.

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