In the end, the auction on October 22 to settle credit default swap contracts on French electronics company, Thomson, was not as catastrophically messy as many had feared. But the event shone an unwelcome light on the conduct of the CDS market at a time when public scrutiny is more unrelenting and unforgiving than ever before.

In particular the auction raised serious questions about the viability of restructuring as a credit event in the CDS market and, more broadly, the continued use of the auction mechanism to decide recovery rates of CDS contracts after a credit event.