Schlosstein picked out the growth of credit-default swaps, a type of derivative often used purely for speculative purposes.

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Credit-default swaps, a type of insurance against bankruptcy, suggest that the borrowing costs of big emerging-markets firms have spiked along with those of their home countries' governments.

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However, because this type of default is expected to be short-lived, and the expected loss to holders of Treasury bonds would be minimal or non-existent, the rating would most likely be downgraded to somewhere in the Aa range.

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However emotionally satisfying, forcing banks to default on debt would cause the type of liquidity runs and market dislocation that brought chaos after the collapse of Lehman Brothers last year.

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Credit default swaps (CDSs) are one type of derivative contract, and regulators in the US and EU put them on a faster track to exchange clearing.

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Of course, this type of policymaking underscores the importance of making the default choice a good one (an adjustable-rate mortgage with no down payment would be an example of a bad default).

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With this move, PayPal aims to become the default payment processor for small businesses and merchants by offering a complete array of services, enabling them to accept any type of payment.

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