Abstract
The article analyzes the functioning of credit derivatives (first of all credit default swaps, or CDS) as a factor of systemic risk. The article examines the impact of credit default swaps on the functioning of the entire modern financial system, states that one of the myths about credit derivatives lies in the fact that they supposedly reduce the risk. In fact, they only transfer risk from one person to another, willing to take the risk. The end result of this risks transformation is a close interdependence between all participants of credit markets and the huge concentration of risks in the hands of individual players, who in case of unforeseen situations face the inability to pay on their obligations. The result is a domino effect that leads to a crisis of the financial system. The 2008 events is a vivid example of such a situation.
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