Reining in credit default swaps

"Credit-default swaps have already figured prominently in taxpayer bailouts. The $150 billion rescue of American International Group, for example, came about because of swaps the insurer had written on mortgage securities. And the $100 billion taxpayer backstop handed to Bank of America on Jan. 16 had a good bit to do with soured swaps that the bank inherited when it acquired Merrill Lynch."