[dh2022]

Huh? People use Credit Default Swaps (CDSs) for decades to speculate on debt defaults...

"South Sea Bubble to learn how to regulate insurance to prevent this kind of thing." - AIG (at the time the biggest insurance company in the US) went down in 2008 during the Great Financial Crisis because they insured sub-prime loans (CDS again).. So I guess there are lots of holes regulators still need to learn....

[occamrazor]

CDS are credit derivatives, not insurance contracts. There is credit insurance, but it only covers a company’s own receivables (or payables).

[danielmarkbruce]

People are absolutely using credit default swaps to insure against risk.