8:30 p.m. EDT: Lehman threatens $62 Trillion CDS market (LEH)

From Reuters:

A failure by investment bank Lehman Brothers (LEH: Quote) would mark the first significant test of the $62 trillion gobal credit derivatives market which has not yet had a major counterparty default....

...Lehman ranked as the seventh-largest credit derivative counterparty by Fitch Ratings in a survey released last year. The private nature of the market, however, makes the size of its books impossible to quantify....

...Major players in the $455 trillion global derivatives market rushed Sunday to offset exposures to Lehman in a rare emergency trading session.

In the session, banks and investors worked to reduce exposures in the credit, equity, interest rate, foreign exchange and commodity derivatives markets.

Credit derivative volumes were significantly smaller, at less than $3 trillion, during the last credit downturn in 2001-2002 which saw defaults by energy group, Enron Corp, and telecommunications giant, WorldCom. Continued...