Collateral damage

The bankruptcy of Lehman Brothers and the reports of derivatives dealer counterparties working through the preceding weekend to untangle the Gordian knot of thousands of Lehman trades have focused attention on the subject of counterparty credit risk. Though there are thousands of inter-dealer trades with billions of dollars of notional trade sizes, ultimate losses to dealers from Lehman's default should be minimal.

Substantial losses to dealers, though, have arisen from their transactions with no

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