http://en.wikipedia.org/wiki/Credit_default_swap
A credit default swap (CDS) is a swap contract in which a buyer makes a series of payments to a seller, and in exchange receives the right to a payoff if a credit instrument goes into default or on the occurrence of a specified credit event, for example bankruptcy or restructuring. The associated instrument does not need to be associated with the buyer or the seller of this contract.
http://en.wikipedia.org/wiki/Image:C...lus_ debt.png
Proportion of credit derivatives (CDSs) nominals (lower left) held by United States banks compared to all derivatives, at the end of the second quarter in 2008. The black disc lower right represents the 2008 US public debt of 10 trillion. The 15.5 trillion US dollar CDSs is 8.5 % of the total derivative nominals held. in the United States for the second quarter of 2008. Foreign Exchange (FOREX) derivatives are 10%, while Interest rate derivatives make up 79.5% of the total.