The costs of insuring European Bank Debt against default fell Friday amid hopes that policymakers are nearing a solution to the debt crisis. In early trading Friday, the five-year CDS spreads on core European financial companies mostly fell, with senior and subordinated banking indexes both tightening, according to Markit. The CDS spreads on major lenders in Germany and France narrowed, with Deutsche Bank AG (DB) and Credit Agricole SA (ACA.FR) tightening the most. Deutsche Bank tightened 10 basis points to 229 basis points, while Credit Agricole tightened nine basis points to 265 basis points. Commerzbank AG (CBK.XE) saw its five-year CDS spread tighten four basis points to 306 basis points, with both BNP Paribas SA (BNP.FR) and Societe Generale SA (GLE.FR) also tightening four basis points. BNP Paribas was back on par with Credit Agricole at 265 basis points, while Societe Generale tightened to 331 basis points. Italian bank UniCredit SpA (UCG.MI) was the only major bank in the core euro-zone economies to see its CDS spread widen, advancing one basis point to 590 basis points. Spanish banks all pushed lower with Banco Popular Espanol SA (POP.MC) narrowing the most, tightening 21 basis points to 840 basis points. At around 0925 GMT, the iTraxx Europe Senior Financials index was six basis points tighter at 284/289 basis points, while the Subordinated Financials index tightened 12 basis points to 503/514 basis points, according to Markit. Credit default swaps are derivatives that function like a default insurance contract for debt. If a borrower defaults, sellers compensate buyers.
Access Investments-Building Awareness - European Union-ROMANIA
Friday, December 2, 2011
The costs of insuring European Bank Debt against default fell Friday amid hopes that policymakers are nearing a solution to the debt crisis. In early trading Friday, the five-year CDS spreads on core European financial companies mostly fell, with senior and subordinated banking indexes both tightening, according to Markit. The CDS spreads on major lenders in Germany and France narrowed, with Deutsche Bank AG (DB) and Credit Agricole SA (ACA.FR) tightening the most. Deutsche Bank tightened 10 basis points to 229 basis points, while Credit Agricole tightened nine basis points to 265 basis points. Commerzbank AG (CBK.XE) saw its five-year CDS spread tighten four basis points to 306 basis points, with both BNP Paribas SA (BNP.FR) and Societe Generale SA (GLE.FR) also tightening four basis points. BNP Paribas was back on par with Credit Agricole at 265 basis points, while Societe Generale tightened to 331 basis points. Italian bank UniCredit SpA (UCG.MI) was the only major bank in the core euro-zone economies to see its CDS spread widen, advancing one basis point to 590 basis points. Spanish banks all pushed lower with Banco Popular Espanol SA (POP.MC) narrowing the most, tightening 21 basis points to 840 basis points. At around 0925 GMT, the iTraxx Europe Senior Financials index was six basis points tighter at 284/289 basis points, while the Subordinated Financials index tightened 12 basis points to 503/514 basis points, according to Markit. Credit default swaps are derivatives that function like a default insurance contract for debt. If a borrower defaults, sellers compensate buyers.
Subscribe to:
Post Comments (Atom)
4 comments:
This fiscal union is nothing but a front for Germany and France to protect their position and their banks from default. There will only ever be democracy on their terms...
Who here really believes Germany would allow the rest of Europe to change its tax or other economic policies just because the rest of Europe out votes them?
If Europe was actually allowed to work as a democracy then all the debtor countries could simply vote that Germany has to hand over all its money!.....Do you think Germany will allow that?
The EU version of democracy is one way, their way
Ireland does not have rock bottom corporation tax rates. France has lower rates. The difference between the two is that France lies about it. The true rate, which is arrived at after various hidden incentives and get-out clauses are deployed, is lower than the largely fictional headline rate.
The logic is that an export-led economy like that of Germany (or China) depends on there being enough people out there able and willing to buy their products. Very often, consumer demand is fuelled by easy credit, which in turn of course leads to debt. Britain is a case in point. If people in Britain, and other similar economies, were no longer able to buy German goods, the German economy would suffer.
It's not much use making reliable, well-engineered electrical products if nobody is going to buy them.
In normal circumstances, European leaders are happy to wait until the day of a Brussels summit to meet one another, leaving any preparations in the hands of their officials. But there is nothing remotely normal about the meeting that is to take place next Friday. It comes at a time of mounting catastrophe in the international markets, as the eurozone faces potential collapse. And if European leaders make a mistake, it will not just be the eurozone countries that face upheaval and devastation.
All of Europe, including Britain, will be plunged into a banking crisis which can only lead to financial catastrophe. Already the contagion is spreading across the globe. Credit markets are even tightening in China, which has so far been immune from any jitters. And this week the United States was panicked into leading a huge intervention into international money markets to rescue the tottering global banking system, amidst rumours that a major European bank was on the edge of insolvency.
This is why David Cameron chose not to delay meeting French President Nicolas Sarkozy until their formal encounter next week. The leaders met yesterday, and the Prime Minister has been told by officials that he can leave nothing to chance.
Furthermore, I can reveal that Mr Cameron is facing overwhelming behind the scenes pressure from President Obama (who is panicking that a world economic collapse will ruin his re-election chances) and his Treasury Secretary Timothy Geithner to throw Britain’s weight behind the rescue package being hammered together by France and Germany to pull Europe back from the abyss.
Post a Comment