NEW YORK--(BUSINESS WIRE)--Link to Fitch Solutions' Report: Fitch Solutions' Risk and Performance
Monitor
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=646771
While European sovereign credit default swap (CDS) spreads are still being punished, CDS on European banks continue to widen despite the latest bank stress results, according to Fitch Solutions in its latest Risk and Performance Monitor.
European sovereign CDS widened another 15% last week. "Germany was the biggest mover with CDS widening 30%, while spreads on France widened 26% and Italy came out 25%," said Author and Director Diana Allmendinger. "Germany has thus far been resilient during the Eurozone crisis so the recent jump in credit protection prices may be a sign that market concern has become more widespread."
Elsewhere, CDS on European banks widened 11% despite seemingly more favorable bank stress test results. "The CDS market does not appear reassured that only eight banks failed the second round of tests," said Allmendinger. "The assumptions used are being criticized as being too lenient by some market participants."
Further accentuating this point is the fact that CDS on Portuguese banks saw the most sell off (22%) despite actually passing the stress tests.
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