Although the use of Credit Default Swaps (CDS) by certain banks and insurance companies to trade mortgage-related risks exacerbated losses from the financial crisis, CDSs were not a fundamental cause of the crisis and in important ways even helped to reduce its impact. Stricter limitations on the use of CDSs by banks and insurance companies may help to prevent large risks from building in the financial system. However, recent efforts to increase the stability and transparency of derivatives markets by market participants acting under supervision of the Federal Reserve Bank of New York call into question the extent to which regulatory reform is necessary.