NEW YORK (CNNMoney) -- For investors, the words credit default swap can bring back painful memories of 2008. But in the case of Greece, the dreaded derivatives may not be the ticking time bomb some have feared.
Early Thursday, the industry group responsible for deciding when CDS contracts are triggered, said a "credit event" had not occurred in Greece. But the International Swaps and Derivatives Association did leave the door open, saying the situation could change "as further facts come to light."
Credit default swaps are derivatives contracts that investors use to insure against, or profit from, a default. CDS contracts on mortgage-backed securities were at the heart of the crisis that brought the global financial system to its knees four years ago.
The ISDA was asked to review legal steps Greece has taken to force private-sector bondholders to take part in a planned restructuring of Greek government debt, which the nation needs to qualify for a €130 billion bailout from the European Union and International Monetary Fund.
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