Interconnectedness in the CDS Market
用网络方法分析CDS市场结构，发现主要参与者高度互联，这有助于评估市场稳定性和风险传染，对理解对手方风险有实际意义。
Concentrated risks in the market for credit default swaps (CDSs) are widely considered to have contributed significantly to the 2007–08 financial crisis. We examine the structure of the CDS market using a network-based approach that allows us to capture the interconnectedness between dealers and nondealers of CDS contracts. We find a high degree of interconnectivity among major market participants. Our work helps assess the stability of the CDS market and the potential contagion among market participants. Our findings are of practical importance because even after central clearing becomes mandatory, counterparty risk will remain a relevant systemic consideration owing to the long-term nature of CDS contracts.