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ny to regulate credit default swaps September 23, 2008

Posted by Bradley in : Uncategorized , trackback

The Office of the Governor of New York announced yesterday that New York will be regulating credit default swaps which are insurance products (i.e. where the protection buyer owns the underlying asset) from the beginning of next year:

So called “naked swaps”are not insurance and cannot be regulated by the State..

The Circular Letter to which the press release refers is dated September 12.

The move raises the question whether (from a regulatory perspective) it really makes sense to have different treatment of a transaction where the distinguishing criterion is whether it is used as insurance or for speculation.

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