Following the fiscal cliff resolution in the United States, credit default swaps (CDS) on European banks are tightening across the board save for Greece. Italian and Spanish banks were the most improved, while German and French banks were close behind. Additionally, the Basel Committee has imposed a four-year delay for European banks to improve their liquidity requirements, which would have tied up a large amount of capital at financial institutions. This is an additional tailwind in the near-term for European banks.
