Last updated: March 24, 2023 at 5:39 pm ET
Initial publication: March 24, 2023 at 5:10 p.m. ET
Deutsche Bank shares slumped on Friday, putting the spotlight on the health of another global systemically important bank ahead of the weekend.
Shares in German lender XE:DBK fell 8% in Frankfurt trading and the Euro Stoxx bank index XX:SX7E fell 4%.
Deutsche Bank’s 5-year credit default swaps were widened on Thursday, Portal reported…
Deutsche Bank shares slumped on Friday, putting the spotlight on the health of another global systemically important bank ahead of the weekend.
Shares in German lender DBK fell 8% in Frankfurt trading and the Euro Stoxx bank index SX7E fell 4%.
Deutsche Bank’s 5-year credit default swaps widened Thursday in the biggest one-day rise in its history, according to Portal.
It should be noted that Deutsche Bank’s 5-year credit default swap, which was at 175 on Thursday, is nowhere near Credit Suisse’s peak, which stood at 1,194, according to data from S&P Global. The higher the value of the CDS, the more likely the market sees the default of the issuer.
Deutsche Bank’s AT1 bonds have fallen in value after Switzerland wiped out Credit Suisse’s CSGN securities in the wake of its takeover by UBS UBSG.
The Invesco AT1 Capital Bond UCITS ETF AT1, which invests in these convertible bonds, is down 18% this month as investors lose confidence in the securities. European and other banking regulators around the world have insisted they will not follow Swiss precedent and will first drop banks’ equity to zero before wiping out convertible securities if they fail.
UBS UBS
also feels the stress in a deal the banks say may not close this year. UBS shares fell 5%.