Three banks have 45% of the counterparty exposure, Citigroup, UBS and Merrill Lynch, making the chances of a banking industrywide rescue remote, even bank executives acknowledge.

FORBES: Magazine Article

Speculation about whether the Fed will keep the window open has only exacerbated concerns about the counterparty exposure of the big brokers and can perhaps explain the skittishness over Lehman Monday.

FORBES: Magazine Article

But the fear then was that if the bailout wasn't arranged, a collapse of Long-Term Capital would ripple through the global banking system, which had major exposure as a counterparty to those highly leveraged bets.

FORBES: Countrywide Is On Its Side

In the meantime, it remains difficult for investors to survey a fund's exposure to both the market risk and the counterparty risk in a swap.

WSJ: Swaps Add Risk to Fund Portfolios