True or False?

1. A CDS is potentially dangerous because it can incentivize risky investments, like emerging markets bonds or subprime loaded MBS, and transfer risk outside of the financial institutions to insurance industry as a form of insurance.

2. Credit default swaps contributed to the financial crisis of 2007-2009 by making it easier for sellers of insurance to assume and conceal risk Since 2008 swaps market has come under stricter regulation via Dodd Frank,

3. If swaps, like CDS, become very regulated this will prevent future collapses and the financial engineers will have no other tools to create.

What is a credit default swap? How were CDS used prior and during the 2008 financial crisis