FMI by EL YH https://padlet.com/elwmj2018/gn2t1hxm4h7n6nau Made with fortitude en-us 2022-06-17 01:01:34 UTC 2025-11-07 20:04:02 UTC hello@padlet.com Senthil https://padlet.com/elwmj2018/gn2t1hxm4h7n6nau/wish/2223520955 Please feel free to share your thoughts

]]> 2022-06-17 01:04:00 UTC https://padlet.com/elwmj2018/gn2t1hxm4h7n6nau/wish/2223520955 SHIM YI HUI elwmj2018 https://padlet.com/elwmj2018/gn2t1hxm4h7n6nau/wish/2223521806 The term credit default swap (CDS) refers to a financial derivative that allows an investor to swap or offset their credit risk with that of another investor. To swap the risk of default, the lender buys a CDS from another investor who agrees to reimburse the lender in the case the borrower defaults.]]> 2022-06-17 01:05:06 UTC https://padlet.com/elwmj2018/gn2t1hxm4h7n6nau/wish/2223521806 Bashir https://padlet.com/elwmj2018/gn2t1hxm4h7n6nau/wish/2223524949 Case example of CDS 


Prior to the financial crisis of 2008, there was more money invested in credit default swaps than in other pools. The value of credit default swaps stood at $45 trillion compared to $22 trillion invested in the stock market, $7.1 trillion in mortgages and $4.4 trillion in U.S. Treasuries. In mid-2010, the value of outstanding CDS was $26.3 trillion.

Many investment banks were involved, but the biggest casualty was Lehman Brothers investment bank, which owed $600 billion in debt, out of which $400 billion was covered by CDS.
]]> 2022-06-17 01:08:44 UTC https://padlet.com/elwmj2018/gn2t1hxm4h7n6nau/wish/2223524949 AIG bailed out in 2008 elwmj2018 https://padlet.com/elwmj2018/gn2t1hxm4h7n6nau/wish/2223528547 AIG was one of the beneficiaries of the 2008 bailout of institutions that were deemed "too big to fail." The insurance giant was among many that gambled on collateralized debt obligations and lost. AIG survived the financial crisis and repaid its massive debt to U.S. taxpayers.]]> 2022-06-17 01:12:22 UTC https://padlet.com/elwmj2018/gn2t1hxm4h7n6nau/wish/2223528547 CDS trigger 2008 financial crisis? elwmj2018 https://padlet.com/elwmj2018/gn2t1hxm4h7n6nau/wish/2223540749 The most significant problems underlying the financial crisis were not directly caused by CDS but rather by a combination of the dramatic decline in the real estate market and highly levered financial institutions holding large investments in subprime securitizations.]]> 2022-06-17 01:23:27 UTC https://padlet.com/elwmj2018/gn2t1hxm4h7n6nau/wish/2223540749