A credit default swap (CDS) kwangila ce ta kasuwanci tsakanin ɓangarori biyu, inda "mai saye" yake biyan "mai sayarwa" kuɗi a lokaci-lokaci don samun haƙƙin biyan kuɗi idan an sami tsoho ko "abin da ya faru na bashi" dangane da gazawar wani ɓangare na uku. Suna kama sosai da kwangilar inshora a kan yiwuwar faɗuwar kamfani, musamman kan lamuni da bashin kamfani na "kamfanin tunani" wanda shi ne batun CDS. Sabanin inshora, duk da haka, babu iyaka ga adadin lokutan da kamfani zai iya samun rufin CDS ko kasancewa batun CDS. A madadin ƙananan biyan kuɗi kamar kuɗin inshora, mai saye da CDS zai iya samun riba mai yawa idan batun ya faɗi. Faɗuwar Lehman Brothers kwanan nan ta haifar da abin da ya faru na bashi, wanda daga ƙarshe ya kai ga biyan cents 92 a kowace dala a matsayin nauyi a kan CDS da aka rubuta kan bashin Lehman.

A credit default swap (CDS) is a credit derivative contract between two counterparties, where the “buyer” makes periodic payments to the “seller” in exchange for the right to a payoff if there is a default or “credit event” regarding the failure of a third party. They are very similar to an insurance contract over the possibility of company failure particularly on the bonds and corporate debt of the “reference entity” company which is the subject of the CDS. Unlike insurance, however, there is no limit on the number of times that a company can be covered or subject to a CDS. In return for small payments like insurance premiums the buyer of the CDS could stand to make an enormous windfall profit in the event of the failure of the subject. The recent failure of Lehman Brothers caused a credit event which ultimately led to a 92 cents on the dollar liability on CDSs written on Lehman debt.

Credit default swaps são the most widely traded credit derivative product. Bankin Duniya don Daidaituwar Kuɗi (BIS) ta bayar da rahoto cewa adadin notional na CDS na OTC da ba a biya ba ya kai dala biliyan 42,600 (dala tiriliyan 42.6) a watan Yuni na 2007. Zuwa ƙarshen 2007, an kiyasta cewa kwangilolin CDS sun kai kimanin dala tiriliyan 60. A Amurka kawai, Ofishin Mai Kula da Kuɗi (Office of the Comptroller of the Currency) ya ruwaito cewa adadin notional na derivative na bashi da ba a biya ba daga bankunan da ke ba da rahoto ya kai dala tiriliyan 16.4 a ƙarshen watan Maris na 2008. (Domin a fahimci waɗannan lambobi, CIA World Fact Book ta kiyasta GDP na Amurka na 2007 a dala tiriliyan 13.) Wani babban bambanci tsakanin credit default swaps da sauran nau'ikan inshora shi ne, ba sai kana mallakar bond ko kayan aikin da ake inshora a kansa ba kafin ka samu inshorar. Idan bond ɗin ya faɗi, za a biya ka, muddin bankin da ya rubuta kwangilar bai faɗi ba. Duk da haka, "mai inshorar" bond ɗin ba ya ƙarƙashin wata hukuma a kowace kasuwa, kuma ciniki ɗin galibi yana wajen duk wani ikon gwamnati. Masu hasashe za su iya samun kuɗi ta hanyar sayen inshora a kan bonds na kamfani, sannan su yi short na hannun jarin kamfanin cikin yawa (sayar da hannun jarin ba tare da sun mallake shi ba), wanda ke matsa wa kamfanin lamba ya faɗi, ko kuma darajar CDS ɗinsu ta tashi. Idan kamfanin ya faɗi, ribar na iya zama babba ƙwarai.

Credit default swaps are the most widely traded credit derivative product. The Bank for International Settlements reported the notional amount on outstanding OTC credit default swaps to be $42.6 trillion in June 2007. By the end of 2007 there were an estimated USD 60 trillion worth of Credit Default Swap contracts. In the US alone, the Office of the Comptroller of the Currency reported the notional amount of outstanding credit derivatives from reporting banks to be $16.4 trillion at the end of March, 2008. (To put these numbers in perspective, the CIA World Fact Book estimated the US GDP for 2007 at $13 trillion)/ One large difference between credit default swaps and other types of insurance, is you do not need to own the bond or instrument being insured in order to obtain insurance on it. If the bond fails, then you get paid, provided the bank writing the contract does not fail. Yet the “insurer” of the bond is not regulated on any exchange and the transaction is largely beyond any government regulation. Speculators can make money by purchasing insurance on a company's bonds then short the stock (sell the stock without owning it) of the company in great quantity, causing pressure on the company to either fail or the value of their CDS to rise. If the company fails the returns can be enormous.

Akwai babban yawan matsayin hasashe a cikin CDS – kasuwar ta fi girma sosai fiye da bashin kamfanoni da take rufewa. Ana iya fahimtar dalilin rage haɗarin gazawar kamfani ga waɗanda ke riƙe da bashin kamfanin da ake magana a kansa. Amma idan CDS sun kai sau da yawa na bashin da ke wanzuwa, a bayyane yake cewa masu hasashe da yawa suna caca a kan gazawar kamfani maimakon neman rage haɗari. Ga Lehman Brothers, jimillar bashin dala biliyan 150 ne, amma an fitar da kwangilolin CDS na dala biliyan 400. Kasuwar dala tiriliyan 60 ta waɗannan "makamai masu lalata jama'a" ta kai caca zuwa wani mataki sabo kuma wanda ba a taɓa gani ba.

There is a massive overhang of speculative positions in CDS – the market is dramatically larger than the corporate debt which it is covering. One can possibly understand the motive for mitigating the risks of corporate failure for those holding the corporate debt of the reference company. However, when CDS amount to several times the debt in existence it is clear that a large number of speculators are gambling over company failure rather than seeking to mitigate risk. For Lehman Brothers $150 billion total of debt, $400bn of CDS contracts were in issuance. The $60 trillion market for these weapons of mass destruction has taken gambling to a new and unprecedented level.