Regulating Credit Default Swaps

• Main Authors: Hsueh, Fuping, 薛復平
• Other Authors: Chuang, Yung-Cheng
• Format: Others
• Language: zh-TW
• Published: 2013
• Online Access: http://ndltd.ncl.edu.tw/handle/35732584032815961137

碩士 === 東吳大學 === 法律學系 === 101 === The credit default swap (CDS), traded in the Over-The-Counter (OTC) market, is a type of financial instrument that once has created prosperous profits to the Wall Street financial institutions yet turned out to be the core of the 2008 financial crisis in the United States, mostly due to the deregulation policy over the OTC market. The bailout of AIG cost the US taxpayers of over $180 billion just to make up an improper regulatory policy. Although CDS market consists of sophisticated investors, from the result of huge costs in the relevant crisis events, self-regulating is not sufficient to neither improve the transparency to the OTC market nor solve the problem of information asymmetry. It is necessary to consider increasing the regulation level while ruling the CDS. This dissertation focuses on the economic realities of CDS. Through observing the risks of issuing CDS and examining CDS against insurance contract, option, security, i.e., the financial instruments with similar characters, this research will explore whether CDS may constitute a security and hence shall be regulated as so to reduce the possible risks under the current regulatory scheme.