Bloomberg is spinning this as "even bigger than Lehman," but that seems backwards to me. Shouldn't it be "Lehman CDS payouts nearly as large as entire country meltdown CDS fallout" ?

The auction was the first of three being held this week to settle credit-default swaps after the Icelandic government seized its three biggest banks because they couldn't raise short-term funding. The cost to sellers of contracts linked to Landsbanki, Kaupthing Bank hf and Glitnir Banki hf's may be $7 billion, compared with the $5.2 billion for settling bankrupt Lehman Brothers Holdings Inc.

Landsbanki Swap Sellers to Pay $1.7 Billion to Honor Contracts [Bloomberg]