UBS's five-year CDS also shot up 14 bps from
Thursday's close to 130 bps, the data showed.
Banking stocks fell sharply across Europe, with heavyweights
Deutsche Bank and UBS hit hard by worries that the worst
problems in the sector since the 2008 financial crisis were not
yet contained.
"Underlying sentiment is still cautious and in this
environment no one wants to go into the weekend risk-on," said
Nordea chief analyst Jan von Gerich.
European banks' Additional Tier 1 (AT1) debt also came under
fresh selling pressure, with Deutsche and UBS AT1s down around
four and two cents in price, respectively, according to Tradeweb
data.
Bank AT1s have been hurt since the Swiss regulator ordered
16 billion Swiss francs ($17.5 billion) of Credit Suisse's AT1
debt to be wiped out as part of its rescue takeover by UBS last
weekend.
Shareholders, who usually rank below debt investors when a
company becomes insolvent, will receive $3.23 billion.
Although European regulators and authorities in Asia have
said this week they would continue to impose losses on
shareholders before bondholders - unlike the treatment of
bondholders at Credit Suisse - unease lingers.
(Reporting by Chiara Elisei and Amanda Cooper; Writing by Dhara
Ranasinghe; Editing by Susan Fenton)
LONDON, March 24 (Reuters) - The cost of insuring
against the likelihood of default by European banks rose sharply
on Friday, as concern about the outlook for the sector continued
to grip markets, almost a week on from the collapse of Credit
Suisse .
Deutsche Bank's five-year credit default swaps
(CDS) jumped 19 basis points (bps) from Thursday's close to 222
bps, data from S&P Global Market Intelligence showed.
Five-year CDS on the German bank were trading
at their highest levels since early 2019 and on Thursday saw
their largest one-day rise on record, according to Refinitiv
data.
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