Credit default swap (CDS)

{
  "id": "MLC-T-INS-001021",
  "term": "Credit default swap (CDS)",
  "field": "Insurance and risk management",
  "definition": "A financial derivative contract where one party, the protection buyer, pays a periodic premium to another party, the protection seller, in exchange for protection against a credit event on a specified reference entity. If a credit event, such as a bankruptcy or default, occurs, the protection seller compensates the buyer for the loss. The notional value of the underlying debt can be in the millions or billions of dollars.",
  "abbreviation": "CDS",
  "url": "https://mlchart.com/terminology/insurance/credit-default-swap-cds/"
}