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UC Davis Legal Studies Research Paper Series
Research Paper No. 211
March 2010
Clearing Credit Default Swaps: A Case Study in Global Legal
Convergence
Anupam Chander* and Randall Costa**
This paper can be downloaded without charge from
The Social Science Research Network Electronic Paper Collection:
http://ssrn.com/abstract=1576765
*
Professor of Law, University of California, Davis; AB, Harvard College; JD, Yale Law School.
**
Managing Director, Citadel Investment Group, LLC (“Citadel”); BA, Yale College; MA, Yale University,
JD, Yale Law School. This author was involved in Citadel’s efforts in support of central counterparty clearing for
CDS; however, the views expressed herein are those of the authors only and are not intended to represent the views
of Citadel. The authors thank Douglas Arner, Jack Ayer and participants in the University of the Pacific, McGeorge
School of Law financial crisis conference organized by Frank Gevurtz, for insightful comments, Nora Hayes-Roth
and Ned Ng for helpful research assistance, and Matthew Lawrence for his research and comments.
10 Chi. J. Int’l L. 639 (2010)
1
Clearing Credit Default Swaps: A Case Study in Global
Legal Convergence
Anupam Chander* and Randall Costa**
In the wake of the global financial crisis, American and European
regulators quickly converged on a reform intended to help stave off similar
crises in the future: central counterparty clearinghouses for credit default swaps.
On both sides of the Atlantic, regulators identified credit default swaps (CDS) as
a central factor in the crisis that seized Bear Stearns, Lehman Brothers,
American International Group (AIG), and ultimately the world.1 Regulators
*
Professor of Law, University of California, Davis;