Argentina's default this week will trigger payouts on around $1bn on insurance contracts linked to the country's bonds, according to the International Swaps and Derivatives Association.
The ISDA decided on Friday that Argentina's default constituted a "credit event", enabling investors in credit default swaps to seek payment.
Its declaration came as Citigroup became the first big US bank to warn that it could face litigation over its role as a custodian for Argentine debt after the country defaulted on Wednesday.
Citi is a custodian for some Argentine bonds and has been entangled in legal proceedings over transferring Buenos Aires' payments due to a US court ruling.
Argentina's default was triggered by its failure to complete a $539m interest payment on bonds by a deadline on Wednesday, although it had deposited the funds at the bondholders' trustee, Bank of New York Mellon, which was also prevented from transferring the funds.
Citi also said if US rating agencies downgraded Argentina it could trigger losses of around $80m. The bank is referring to a downgrade by the Interagency Country Exposure Review Committee, or ICERC. A downgrade would result in mandatory loan loss or other reserving requirements.
Citi cut its net investment in its Argentine operations to $670m at the end of the second quarter, compared to $690m in the first quarter.
A deterioration of the economic and political situation in the country as a result of default could "negatively impact Citi's revenues and funding costs, as well as further limit Citi's ability to hedge against its net investment in Argentina," the bank said.
Rating agencies S&P and Fitch have already downgraded Argentina's debt.
At the end of June the bank had total third-party assets of $3.6bn in Citi Argentina, compared to $3.5bn at the end of the first quarter. Those assets are largely made up of cash, loans and securities.
Citi is in an even more exposed position than other institutions affected by the order, as its local subsidiary is regulated and falls under Argentine law.
US District Court Judge Thomas Griesa on Friday denied Argentina's request for a new mediator to oversee further negotiations with holdout creditors, and ordered the two parties to continue talks until a settlement is reached despite Argentina's default on Wednesday afternoon.
Additional reporting by Luc Cohen and Tracy Alloway in New York, and Elaine Moore in London
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