European banks are experiencing continued drops, with Deutsche Bank falling by more than 7% in New York

According to S&P Market Intelligence data, the cost of credit default swaps for Deutsche Bank – Germany’s largest bank – hit a four-year high today. This comes as shares in the bank have fallen by 20% this month. Credit default swaps are a form of insurance for bondholders

European banks’ shares continued to decline on Friday, with Deutsche Bank falling by more than 13% on the German Xerta exchange.

Despite policymakers’ efforts to reassure investors about the sector’s health, a series of failures on both sides of the Atlantic has left investors nervous, leading to renewed volatility. In premarket trading, Deutsche Bank shares fell by over 7% in New York.

This decline followed a surge in the cost of credit default swaps (CDS) for several major European banks, including Deutsche Bank. On Thursday, Deutsche Bank’s pricing for CDS jumped to 173 basis points from 142 basis points the day before, which is a form of insurance for bondholders against the company’s default.

The AT1 bonds of Deutsche Bank, an asset class that made headlines this week due to Credit Suisse’s controversial write-down of its AT1s as part of the UBS rescue deal, also sold off sharply. Reports suggested that several other European banks would suffer significant losses from the AT1 wipeout.

CDS pricing for other top European banks also increased.

Linking Shareholders and Executives :Share Talk

If anyone reads this article found it useful, helpful? Then please subscribe or follow SHARE TALK on our Twitter page for future updates. Terms of Website Use All information is provided on an as-is basis. Where we allow Bloggers to publish articles on our platform please note these are not our opinions or views and we have no affiliation with the companies mentioned

Weekly Newsletter

Sign up to receive exclusive stock market content in your inbox, once a week.

We don’t spam! Read our privacy policy for more info.