- Barclays predicts $80 billion in losses from counterparty CDS defaults in 2008.
- Bankruptcy code exempts swaps and repos from the automatic stay, giving hedge funds accelerated right to terminate under swap agreements.
- When selling CDS to a broker-dealer, hedge funds must post up-front collateral and supply additional payments if the reference asset declines in value.
- Amount and timing of recoverable collateral depends whether broker-dealer liquidates under Chapter 7 or under SIPA.