credit default swap

noun

Legal Definition of credit default swap

: a credit insurance contract in which an insurer promises to compensate an insured (as a bank) for losses incurred when a debtor (as a corporation) defaults on a debt and which can be purchased or sold by either party on the financial market

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“Credit default swap.” Merriam-Webster.com Legal Dictionary, Merriam-Webster, https://www.merriam-webster.com/legal/credit%20default%20swap. Accessed 28 Jan. 2021.

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