Contracts on London-based Barclays, which last week reported writedowns of about $2.7 billion, have risen to 70 basis points, a tenfold increase since June. Contracts on Kaupthing Bank Hf, the country's biggest lender, have more than tripled since August to about 345 basis points, according to data compiled by Bloomberg.īarclays Plc and Zurich-based UBS AG have the biggest risk outside of Iceland. Icelandic banks have the highest risk of default among European lenders, according to credit-default swap prices compiled by Bloomberg. The indexes increase when perceptions of credit quality worsen. Contracts on the Markit iTraxx Europe Index of 125 companies rose 7.25 basis points to 64.25 basis points, and the CDX North America Investment Grade Index increased 5 basis points to a record 86.25 basis points today, according to Deutsche Bank. The 3.5 percent decline to 230.25 was the steepest in one day since August.Ĭredit-default swaps on banks and insurers are as expensive as for debt from European companies with investment-grade ratings. ``The news flow is so bad and there is no relief in sight.''īank stocks dropped to the lowest in two years, according to the Bloomberg Europe Banks and Financial Services Index. ``Everything is signaling that the market may switch to panic mode,'' Philip Gisdakis, a credit analyst at UniCredit SpA in Munich, said in an interview today.
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Mortgage finance company Freddie Mac may need to raise as much as $6 billion to boost capital because of the worst housing slump in at least 16 years, according to Fox-Pitt Kelton analyst Howard Shapiro. Mitsubishi UFJ Financial Group Inc., Japan's biggest publicly traded bank, posted a 63 percent drop in second-quarter profit because of losses linked to credit cards and U.S. climbed 5 to 101.5, according to Phoenix Partners. Contracts on Merrill Lynch & Co., the world's biggest brokerage firm, increased 25 basis points to 170, and Citigroup Inc. 21 (Bloomberg) - The risk of banks defaulting on their debt rose to the highest on record as losses by mortgage finance company Freddie Mac fueled concern that lenders will add to more than $50 billion of writedowns worldwide.Ĭredit-default swaps on the Markit iTraxx Financial Index, a benchmark for the cost of protecting the bonds of European banks and insurers, rose 6 basis points to 63.5, the highest since its start in 2004. Bank Default Swaps at Highest on Record Amid Writedown Concern
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