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ECB Wins EU Court Ruling to Keep Greek Swap Information Secret

By Stephanie Bodoni and Elisa Martinuzzi
Published February 20, 2014 Bloomberg

The European Central Bank won’t have to disclose how Greece used derivatives to hide its debt after the European Union’s top court quashed efforts to make the information public.

The European Union Court of Justice, in a Feb. 6 decision, rejected a freedom-of-information request by Bloomberg News to access two internal ECB papers, citing procedural errors.

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Factbox: CDS Set to Pay Out if U.S. Stumbles Into Default

By Marc Jones
Published October 9, 2013 Reuters

The credit default swaps investors have bought as insurance against a U.S. government default are expected to pay out if Washington officials allow what many still consider as unthinkable to happen.

In the CDS market, what qualifies for a payout has not always been straightforward because of the different interpretations of what does and does not constitute a default.

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Greece Credit-Default Swaps Prices Offered by Dealers, CMA Says

By Abigail Moses
Published May 29, 2013  Bloomberg

Dealers are offering prices on credit-default swaps linked to Greek sovereign bonds after the contracts paid out last year following a restructuring of the nation’s debt.

It now costs $3.5 million in advance and $100,000 annually to insure $10 million of Greek debt for five years, signaling a 49.4 percent probability of default within that time, according to CMA. The data provider, which compiles quotes from dealers in the private market, has published prices on Greek swaps every day since May 21.

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New CDS Trigger Event Proposed to Tackle Bail-In

By Christopher Whittall
Published May 15, 2013 International Financing Review

The proposal forms part of a wider overhaul of the CDS definitions, which are being revisited for the first time in a decade to fix a number of flaws in the instruments, including the way they react to sovereign debt restructurings such as that of Greece (see article).

Along with sovereign CDS, amending financial CDS to account for the new bail-in regime is seen as a top priority in overhauling the contract to ensure it remains a viable hedging product.

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Dealer Prices on Greek Credit Swaps Reappear as Bonds Rally

By Katy Burne
Published October 18, 2012 WSJ The Euro Crisis

Banks are quoting prices for credit-default swaps on Greek government bonds for the first time since the country restructured its debt in March, while there are hopes Greece is close to securing fresh aid.

While the derivatives, which act like insurance against a default, haven’t traded since March, some banks recently began quoting prices in an effort to revive the market, according to people who had received the prices

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Spanish swaps contracts raise concerns

By Christopher Whittall
Published August 11, 2012 International Financing Review

The prevalence of local law derivatives contracts might cause serious headaches for international lenders if Spain were to exit from the euro. Greece’s high-profile restructuring in March and subsequent difficulties in complying with bailout programmes has put it top of the list of potential countries dropping out of the single currency. But while a return to the drachma could spell disaster for holders of Greek bonds and loans, the lack of a local derivatives contract has meant that international banks are less concerned about swaps with Greek counterparties.

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ECB Could Take Haircut on Greek Bonds in 'Last Chance' Plan

By Roland Gribben
Published July 29 2012 Telegraph

Intensive discussions now under way among EU policy-makers involve the European Central Bank and a number of central banks taking a significant write-down on their Greek bonds as the price for avoiding a eurozone break-up and losing its weakest link.

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Derivatives Desks Prep for Greek Exit

By Christopher Whittall
Published May 19 2012 International Financing Review

Major dealers have been furiously scanning through the legal contracts governing their derivatives trades with Greek counterparties, as fears of Greecepulling out of the eurozone have intensified during the past week.

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Credit-Default Swaps Work (See Greece); Eyes in the Sky vs. Privacy

By Jonathan Alter
Published March 15 2012 Bloomberg Businessweek

As it wrestled with Greece’s debt crisis for the past two years, the European Central Bank took pains to avoid triggering credit-default swaps written on Greek bonds. But on March 9, Greece forced payouts on swaps contracts when it required all private bondholders to forgive more than €100 billion ($130 million) of debt as part of the biggest sovereign-debt restructuring in history.

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Greece's Credit Non-Event

Published March 12 2012 Wall Street Journal

So after all the weeks of angst and protest, Greece was able to restructure its debt. But it couldn't do so without imposing losses on unwilling creditors, and so late Friday the International Swaps and Derivatives Association declared that Greece had defaulted at last, triggering among other things credit default swaps on Greek debt. The world did not end.

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