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  A stable bank backed by a strong economy, like RBS eh.
  
  Alexander you must understand a few points:
  1/ All investment must be diversified to spread and reduce risk. There is no such thing as no risk in investment, only different risks. The question was did DDC diversify - they did, so only a small amount was exposed to the institutional risk of Icelandic Banks about 4%. It would have been far more risky to have placed all this investment in RBS, or Lloyds, or HSBC or Barclays - or indeed 25% into each of them, this still would not be enough diversification to spread institutional risk. If limited only to AAA institutions you would reduce diversification and reduce returns. By using A, AA and AAA institutions you would have a much greater diversity of institutions and a higher return from those with a lower risk rating. OK I am over simplifying this but the principal is correct.
  
  2/The buying and selling of packages of debt is a normal and legitimate practise. It works well and there are funds that trade this debt to generate returns and a level of income for their investors. These form the backbone of many investment portfolios, particularly those generating an income. These are of lower volatility than equities. There were problems in the USA that arose due to reforms brought in by Clinton. This resulted in a situation in which some 'toxic debt' was mixed in with higher grade debt and was misrepresented in the markets. This was criminal activity. Again that is a simplified explanation.
  
  None of this reflects badly on what DDC did - they acted correctly and diversified their holdings so they were not exposed to excessive risk.
  
  If you cannot understand that then, frankly I just do not have the patience to spell it out again and find even easier language that you might understand. For one thing I doubt that you even want to understand and I have better things to do.

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