BofA Sees Potential 'Disaster' in Credit Default Swap Market
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According to reports from Bloomberg, citing a Bank of America research report, a default of a bond insurer, like ACA Capital (OTC: ACAH), could trigger a "disaster" in the credit-default swaps market.
The report said, ACA Capital may face delinquency proceedings from Maryland Insurance Administration because it can't pay $60 billion of credit-default swaps. The firm said even a credit event for a relatively small monoline, like ACA, could have significant implications. They see huge potential problems for settling credit-default swaps contracts.
Other stocks: MBIA (NYSE: MBI), Ambac (NYSE: ABK).
The report said, ACA Capital may face delinquency proceedings from Maryland Insurance Administration because it can't pay $60 billion of credit-default swaps. The firm said even a credit event for a relatively small monoline, like ACA, could have significant implications. They see huge potential problems for settling credit-default swaps contracts.
Other stocks: MBIA (NYSE: MBI), Ambac (NYSE: ABK).
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