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Message
re: Why are banks hoarding so much $$$?
Posted on 6/19/14 at 7:54 pm to Iowa Golfer
Posted on 6/19/14 at 7:54 pm to Iowa Golfer
quote:
not sure the issuers were ever required to properly reserve for this as they would if they just called some of these what they are, which is insurance
Do you mind explaining your statement again.... Especially the quoted part.....
You talking FDIC insurance? ......
Im not trolling. .. just not understanding
1
Posted on 6/19/14 at 8:13 pm to Mr.Perfect
A credit default swap is an instrument that can be used to insure a bank's loan portfolio. This is one use, they are also traded like a future's contract.
When it all went down, AIG, the largest issuer could pay on the polices they issued. The CDS are regulated as a financial instrument, not an insurance policy.
This is an oversimplification. The CDS serve a very useful purpose, but in my opinion, need to be regulated and the issuers required to reserve for losses.
When it all went down, AIG, the largest issuer could pay on the polices they issued. The CDS are regulated as a financial instrument, not an insurance policy.
This is an oversimplification. The CDS serve a very useful purpose, but in my opinion, need to be regulated and the issuers required to reserve for losses.
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