This master thesis wants to examine the sensibility of Credit Default Swaps as well as to deal with some of the main aspects of the regulation and supervision of financial markets especially in regard of these highly complex derivatives. Chapter 1 wants to underscore the practical relevance of this matter, which can be documented through countless examples taken out of the recent past. Chapter 2 aims at explaining the functionality of these financial instruments at first and to examine the practice of using contracts like the ISDA Master Agreement. Chapter 3 wants to underline the main risks and uncertainties which go hand in hand with the use of Credit Default Swaps. For example there is the threat of disregarding the conventional appraisals of creditworthiness of debtors by the banking system as well as a lot of intransperency in „over-the-counter“- derivatives markets. Chapter 4 introduces some of the main regulatory aspects, such as the „short selling regulation“, EMIR or the whole complex of Basel III. In chapter 5 there are some critical notes regarding the present state of regulating CDS markets.