So. The isolated island thing would be loosely in keeping with the bad bank proposals when it comes to credit default swaps. Or, can they be killed off? It is a faulty analogy (and reversed) because credit default swaps do have predators. But, the predators are human. Or algorithms. Or, it is all vice-versa. So then, what to do with a naive predator whose prey is also the predator? Now we are on an island of tangled snakes eating their own tails as the logic circles and entwines. Apologies.
Perhaps the CDS market can evolve so it stops engineering its own demise. Fast evolution is something that can be done to financial products faster than evolution in the scientific world. World events have just shown this to be true.