A Tangled Web: Can Arbitration Be the Answer to Resolving Manufactured Credit Event Disputes?

Authors

Adam Eisenbud, Benjamin N. Cardozo School of Law

Abstract

Derivatives are financial contracts whose value is derived from, or reliant upon, another asset. Perhaps the most popular derivatives for retail investors are stock options, whose value is derived from the price of an underlying equity. In recent years, financial institutions have developed several innovative derivative products. These products are typically born out of an unmet need in the financial marketplace. Credit derivatives, for example, were created in order to let financial clients mitigate credit risk. A wellknown type of credit derivative is the credit default swap ("CDS"), a privately held, negotiable bilateral contract that allows a lender to transfer the credit risk of a borrower to a third party. Since the inception of the credit default swap in the early 1990's, its use and popularity has grown tremendously. As of the second quarter of 2019, the total gross national amount of outstanding CDSs was approximately $9.4 trillion.

Keywords

Taxation--Transnational, Taxation, Law and Race, Securities Law, Bankruptcy Law, Bankruptcy

Disciplines

Bankruptcy Law | Dispute Resolution and Arbitration | Law | Law and Race | Securities Law | Taxation-Transnational

Recommended Citation

Adam Eisenbud, A Tangled Web: Can Arbitration Be the Answer to Resolving Manufactured Credit Event Disputes?, 22 Cardozo J. Conflict Resol. 153 (2020).
Available at: https://larc.cardozo.yu.edu/cjcr/vol22/iss1/9