# Credit Default Swap (CDS)

*Markets & Instruments — Finicade finance glossary*

Insurance against a borrower defaulting: the buyer pays a regular premium and gets paid out if the borrower fails. It lets investors trade credit risk on its own — and infamously amplified the 2008 crisis.

**Also known as:** cds

**Related terms:** [Credit Risk](https://finicade.com/glossary/credit-risk), [Credit Spread](https://finicade.com/glossary/credit-spread), [Defaulting on a Loan](https://finicade.com/glossary/default-credit)

**Taught in:** Hull Street — Credit Derivatives & 2008

Source: https://finicade.com/glossary/credit-default-swap