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  • I think you nicely answered your own question! One would imagine that capital regulations would provide a convenient expert view of the (in my view artificial) distinction. To cut and shut distressed debt into shiny products is surely the diffĂ©rance where this all falls apart.

  • That is the obvious next step... for now no systemically important financial institution has written credit protection insurance on any of these tranches, but it's only a matter of time!

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