The Derivatives Market’s Helpful Enemies
The launch of two European antitrust investigations into the market for credit default swaps might appear to be no more than a political vendetta against an alleged culprit behind the 2010 European sovereign-debt crisis. But the existence of political motivations does not undermine the legitimacy of the new inquiries.
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CHICAGO – The launch of two European antitrust investigations into the market for credit default swaps (CDS) might appear to be no more than a political vendetta against one of the alleged culprits behind the 2010 European sovereign-debt crisis. The negative perception that most people (especially in Europe) have of CDS has certainly played a role here. After all, foreigners and politically weak companies are often the favorite targets of law enforcement.