Toxic Assests or Harmful Regulation? The Case of CDS

Any crisis needs and explanation and any explanation must be based on a malefactor. For anybody attempting to understand the causes behind the recent financial turmoil, the main culprit is easy to point out - "toxic assets". Since "toxic" raises strong repulsion and the reader may end his/her lecture with the satisfaction of having solved a challenging intellectual puzzle, a general current emerged that blames those who have played with such assets for the negative consequences of their actions. Thus, the expression "toxic assets" has become an essential ingredient of all formal explanations for the undergoing crisis.