Ice storm

Credit event fixings for Iceland's three biggest banks took place in November after the government seized control of the entities, triggering technical defaults. Recovery rates were established at single-digit levels, suggesting massive losses for investors of collateralised debt obligations referencing Icelandic banks. Han-Nee Tay reports

Long after the financial crisis is over, the events that took place in October and November 2008 will be remembered as a watershed for the credit derivatives market. But while credit event fixings in the US for Fannie Mae, Freddie Mac, Washington Mutual and Lehman Brothers have drawn much of the attention, the technical defaults of Icelandic banks Landsbanki, Glitnir and Kaupthing will also be looked back on as defining moments, triggering the first-ever cash-settlement auctions of debt issued