German bank shares fall off, default insurance rises in the middle of other banking panics
German bank shares fall off, default insurance rises in the middle of other banking panics
The shares of Deutsche Bank-Germany's largest lender-began to rush on Friday, as the fears of the financial industry continue to spread according to a number of global banking.
In the meantime, the costs for the failure insurance have increased to a four-year high if the bank collapses.
Is Deutsche Bank the next?
The shares of Deutsche Bank (DBK) fell from 9.06 EUR to EUR 8.25 on Friday-a decrease of 11 % on this day and a decrease of 26 % compared to the previous month. The bank's decline was linked by declines in neighboring European bank shares, including Commerzbank (-5.6 %) and Societe Generals (-6.48 %).
The decline began to accelerate after the price of the five-year-old Credit Default Swaps from Deutsche Bank began Woigner on Friday over 220 (BPS). According to S&P Global Market Intelligence, this is an increase of 142 basis points only two days earlier and the highest level since the end of 2018.
increasing CDS costs indicate the fear of investors about the stability of the bank, despite that of the company Financial results shows consecutive quarters with a profit. In 2022, the bank received a profit after taxes of $ 5.7 billion.
Fears follow the collapse of the Silicon Valley Bank (SVB) at the beginning of this month, which caused the Federal Reserve to save the bank's inserts shortly afterwards as part of "systemic risk exception". Panic soon crossed the Atlantic and claimed the Credit Suisse, which was bought by UBS in a 3.25-mill-US-fusion rescue agreement at the beginning of this week.
Shortly before the rescue campaign of the Credit Suisse, the company's CDS swaps rose to up to 1,194 basis points-much more than the current level of Germans.
on Friday, CNBC market analyst Jim Cramer called that the Deutsche Bank is "well".
possible rescue actions
Deutsche Bank is one of the ten largest banks in Europe, Holding 1.4 Billion dollar In assets at the end of 2022.
For comparison: The SVB held a little more than $ 200 billion in assets, and the FED considered the bank to be systemically relevant to save its inserts. However, European regulatory authorities have already done this blown up the fed for its rescue efforts, since it believes that it could undermine the global credibility of the bank. On Thursday, finance minister Janet Yellen said that her department was ready to do this "Additional action" when securing American benefits, if necessary. .
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