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Credit default Swaps and the Credit Crisis

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Listed:
  • Stulz, Rene

    (University of Columbus)

Abstract

The focus of the paper is on how credit default swaps may have contributed to the credit crisis. The author reviews the mechanisms of credit default swaps in their straightforward use — providing insurance against the defaults of individual companies — before turning to how they were used to take positions on subprime mortgages. He examines the size and growth of the credit default swap market an then turns arguments as to how credit default swaps may have contributed to the crisis.

Suggested Citation

  • Stulz, Rene, 2010. "Credit default Swaps and the Credit Crisis," Ekonomicheskaya Politika / Economic Policy, Russian Presidential Academy of National Economy and Public Administration, vol. 6, pages 157-175.
    • Handle: RePEc:rnp:ecopol:1066
    as

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    References listed on IDEAS

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    1. Francis A. Longstaff & Sanjay Mithal & Eric Neis, 2005. "Corporate Yield Spreads: Default Risk or Liquidity? New Evidence from the Credit Default Swap Market," Journal of Finance, American Finance Association, vol. 60(5), pages 2213-2253, October.
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    More about this item

    JEL classification:

    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • G01 - Financial Economics - - General - - - Financial Crises
    • G13 - Financial Economics - - General Financial Markets - - - Contingent Pricing; Futures Pricing
    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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