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We first prove that when banks can also enter into credit default swaps (CDSs), the clearing problem may have no solution or multiple conflicting solutions, thus leading to default ambiguity. We then derive sufficient conditions on the network structure to eliminate these issues. Finally, we discuss policy implications for the CDS market. <\/jats:p> This paper was accepted by Gustavo Manso, finance. <\/jats:p>","DOI":"10.1287\/mnsc.2019.3304","type":"journal-article","created":{"date-parts":[[2019,6,26]],"date-time":"2019-06-26T18:28:36Z","timestamp":1561573716000},"page":"1981-1998","source":"Crossref","is-referenced-by-count":25,"title":["Default Ambiguity: Credit Default Swaps Create New Systemic Risks in Financial Networks"],"prefix":"10.1287","volume":"66","author":[{"ORCID":"http:\/\/orcid.org\/0000-0003-2161-9948","authenticated-orcid":false,"given":"Steffen","family":"Schuldenzucker","sequence":"first","affiliation":[{"name":"Department of Informatics, University of Zurich, 8050 Zurich, Switzerland;"}]},{"ORCID":"http:\/\/orcid.org\/0000-0001-8525-8120","authenticated-orcid":false,"given":"Sven","family":"Seuken","sequence":"additional","affiliation":[{"name":"Department of Informatics, University of Zurich, 8050 Zurich, Switzerland;"}]},{"ORCID":"http:\/\/orcid.org\/0000-0002-0051-973X","authenticated-orcid":false,"given":"Stefano","family":"Battiston","sequence":"additional","affiliation":[{"name":"Department of Banking and Finance, University of Zurich, 8050 Zurich, Switzerland"},{"name":"Swiss Finance Institute, 8006 Zurich, Switzerland"}]}],"member":"109","reference":[{"key":"B1","doi-asserted-by":"publisher","DOI":"10.1257\/aer.20130456"},{"key":"B2","doi-asserted-by":"publisher","DOI":"10.3982\/ECTA9623"},{"key":"B3","doi-asserted-by":"publisher","DOI":"10.1086\/262109"},{"key":"B6","doi-asserted-by":"publisher","DOI":"10.1038\/ncomms14416"},{"key":"B8","doi-asserted-by":"publisher","DOI":"10.1073\/pnas.1521573113"},{"issue":"17","key":"B9","first-page":"123","author":"Brunnermeier M","year":"2013","journal-title":"Banque France Financial Stability Rev."},{"key":"B10","doi-asserted-by":"publisher","DOI":"10.1162\/jeea.2005.3.2-3.556"},{"key":"B12","doi-asserted-by":"publisher","DOI":"10.1287\/mnsc.2017.2847"},{"key":"B13","volume-title":"STAMP\\euro: Stress-Test Analytics for Macroprudential Purposes in the Euro Area","author":"Dees S","year":"2017"},{"key":"B14","doi-asserted-by":"publisher","DOI":"10.1287\/mnsc.2016.2592"},{"key":"B15","doi-asserted-by":"publisher","DOI":"10.1016\/j.jfs.2017.05.007"},{"key":"B16","doi-asserted-by":"publisher","DOI":"10.1093\/rapstu\/rar001"},{"key":"B17","doi-asserted-by":"publisher","DOI":"10.1287\/mnsc.47.2.236.9835"},{"key":"B18","doi-asserted-by":"publisher","DOI":"10.1257\/aer.104.10.3115"},{"key":"B19","doi-asserted-by":"publisher","DOI":"10.1287\/mnsc.1060.0531"},{"issue":"1","key":"B24","first-page":"6","volume":"1","author":"Fender I","year":"2008","journal-title":"BIS Quart. 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