Soros: Credit Default Swaps Should be “Banned”, are “Truly Toxic”, “Like Buying Life Insurance on Someone Else’s Life and Owning a License to Kill”

Billionaire investor George Soros told a group of bankers who trade credit default swaps:

Some derivatives ought not to be allowed to be traded at all. I have in mind credit default swaps. The more I’ve heard about them, the more I’ve realized they’re truly toxic…

CDS are instruments of destruction which ought to be outlawed …

People buy a CDS not because they expect an eventual default but because they expect them to appreciate in response to adverse developments…

It’s like buying life insurance on someone else’s life and owning a license to kill.

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