And so it can be very much in the interest of bank A to sell-short bank B shares, or buy CDSes on bank B, because they have exposure to bank B. It's the responsible thing to do as a fiduciary, and yet if everyone does it at the same time, it's destabilizing because everyone is selling.

Chanos (born 1957) is an American hedge fund manager and is president and founder of Kynikos Associates a New York City investment company that is focused on short selling. He questioned the stability of Chinese economy stating that historically analogous evidence points especially to a housing bubble mentioning commercial real estate in particular. James S.

James S. Chanos (born 1957) is an American hedge fund manager and is president and founder of Kynikos Associates a New York City investment company that is focused on short selling.