Fitch says 50% Haircuts would Constitute Default; No Official Ruling from ISDA Yet; Wrong Decision Could Kill CDS Market; How Will Setup be Resolved?
The yield on 10-year Italian bonds is back over 6% following a weaker than expected bond auction. Who wants to load up on Spanish, Portuguese, or Italian bonds if they cannot hedge with credit default swaps?No ISDA Ruling YetEveryone is acting as if the International Swaps and Derivatives Association (ISDA) has issued a ruling on on whether 50% haircuts...
