Perhaps the most surprising element of the escalating concern about mispriced and hidden risk in financial markets is the lack of focus on derivatives - so far.

But the pervasive crisis of confidence in financial markets, which is being felt most acutely in complex and opaque sectors, cannot stay away from derivatives forever. And any skepticism about the products is likely to focus on the smallest corner of the market: credit-default swaps (CDS), a class of instruments that not only is vulnerable to a troubled debt market's downdrafts but also has a troubling backlog of unsettled contracts.

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