OUCH! The settlement just cost approx. $367 BILLION.
That means that collectively the people who insured these have to pay this money to those who bought the insurance.
Now in fact, in aggregate, this is a zero sum game - those who bought insurance get the cash and those who sold it lose the cash.
The problem, of course, is where someone doesn't have the oh lets say about $1billion, so they go bankrupt - which means their counterparty is down $1billion which might put them into liquidation. And so on.
What's quite sure is no bank is going to lend any other bank or counterparty any money until the reverberations have died down in a few weeks.
They really need a clearing house so these things can be offset.
Otherwise we really are in the Ice Age.
That just reminds me of the book of the same name by Margaret Drabble. It harks back to the 1974/5 debacle. A beleaguered property developer can't sell anything and the bank won't help ( so what's new?) his marriage falls apart etc etc etc. One of the sites they owned, a gasometer, attracts him strangely with its brooding bulk and silence. He feels most attached to it.
At the very nadir of events, he is suddenly offered a price for the site, and he takes a long last sad look at it.
But the gasometer has befriended him and looked after him, and pulled him through. Excellent story, excellently written.