credit default swap love

Help support Wordnik by adopting your favorite word!

credit default swap

Definitions

from Wiktionary, Creative Commons Attribution/Share-Alike License

  • n. A credit derivative contract between two counterparties, whereby the buyer (seller of risk) makes periodic payments to the seller (buyer of risk) in exchange for the right to a payoff if there is a default or other credit event in respect of a third party called reference entity.

Etymologies

Sorry, no etymologies found.

Examples

Sorry, no example sentences found.

Comments

Log in or sign up to get involved in the conversation. It's quick and easy.

  • “The credit crisis has played out in places most people can’t see. It’s banks refusing to lend to other banks — even though that is one of the most essential functions of the banking system. It’s a loss of confidence in seemingly healthy institutions like Morgan Stanley and Goldman — both of which reported profits even as the pressure was mounting. It is panicked hedge funds pulling out cash. It is frightened investors protecting themselves by buying credit-default swaps — a financial insurance policy against potential bankruptcy — at prices 30 times what they normally would pay.�?

    The New York Times, 36 Hours of Alarm and Action as Crisis Spiraled, by Joe Nocera, October 1, 2008

    October 2, 2008