Self-referencing CDS risk?


Sovereigns have replaced banks at the epicentre of the financial crisis. Anxiety about the level of debt racked up by some eurozone sovereigns before and during the crisis has caused a huge rise in the cost of funding for some countries – and led to fears of contagion throughout the region. A €750 billion emergency loan package agreed by the European Union and International Monetary Fund on May 9 initially seemed to restore confidence, but there are continued concerns about the health of governm