New York Insurance Superintendent Eric Dinallo echoed an earlier pledge during a Senate hearing last week to regulate part of the credit default swap market, while endorsing a more “holistic” approach to the investment option that nearly brought the economy to its knees.
Appearing before the Senate Agriculture Committee, Mr. Dinallo explained that credit default swaps can be divided into two categories.
o The first, he noted, are transactions in which the holder of an obligation, such as a bond, “swaps” the risk of default with another party, who guarantees it for a fee. That transaction, he noted, can be seen as similar in nature to an insurance transaction.
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