Hat tip to JH for providing the following links.
Gordon T. Long compiled a terrific article explaining the progression of derivatives and how they are not just in the hands of private companies, they are actually a part of SOVEREIGN risk. Below is a terrific Graph showing the progression of collapse up the chain:
Please read Long’s article here: Sultans of Swap
While you’re reading that, here is an audio discussion of the article that can help to shed some light on the subject: Interview with Muhammad Rafee discussing the international implications of Swaps