Credit Default Swaps and Financial Risks in the 21st Century

In this paper we pay tribute to one of the most successful financial innovations in recent times: the Credit Default Swap (CDS). Through a literature review on financial risks from 2000-2015 we develop a conceptual map to assess the importance and evolution of the CDS, along with the consequences of its use. CDSs emerge as a powerful and meaningful financial instrument. Given the CDS's versatility, the 21st-century literature about the CDS and its usefulness is very extensive, rendering the CDS a valuable guide with which to investigate the financial risks that have worried researchers, regulators and all of the participants in the financial system