Credit default swap (CDS) ni mkataba wa kifedha wa derivative kati ya pande mbili, ambapo "mnunuzi" hulipa "muuzaji" malipo ya mara kwa mara ili kupata haki ya malipo endapo kutatokea kushindwa kulipa deni au "tukio la mkopo" kuhusiana na kushindwa kwa mtu wa tatu. Yanafanana sana na mkataba wa bima dhidi ya uwezekano wa kampuni kufilisika, hasa kuhusu hati fungani na madeni ya kampuni ya "taasisi ya marejeo" ambayo ndiyo mada ya CDS. Tofauti na bima, hata hivyo, hakuna kikomo cha idadi ya mara ambazo kampuni inaweza kufunikwa au kuwa mada ya CDS. Kwa malipo madogo, kama malipo ya bima, mnunuzi wa CDS anaweza kupata faida kubwa sana endapo mada itashindwa. Kushindwa hivi karibuni kwa Lehman Brothers kulisababisha tukio la mkopo ambalo hatimaye lilisababisha dhima ya senti 92 kwa kila dola kwenye CDS zilizoandikwa kuhusu deni la 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.