European Banking Monitor: More Good News Than Bad

Below are key European banking risk monitors, which are included as part of Josh Steiner and the Financial team's "Monday Morning Risk Monitor".  If you'd like to receive the work of the Financials team or request a trial please email .

 

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European Financial CDS - Europe resumes its winning ways. We are seeing broad-based improvement across Spanish, Italian, French and even Greek banks. The only notable widening came from Sberbank of Russia, where swaps widened by 19 bps to 212 bps.

 

European Banking Monitor: More Good News Than Bad - w. bank cds

 

Sovereign CDS – Sovereign swaps had a good week last week. The US posted a sharp improvement of 7 bps, falling to 30 bps. France and most of the rest of the Europe also moved lower. The only negative movers were Japan (+2 bps) and Germany (+1 bp). 

 

European Banking Monitor: More Good News Than Bad - w. sov1

 

European Banking Monitor: More Good News Than Bad - w. sov2

 

European Banking Monitor: More Good News Than Bad - w. sov3

 

Euribor-OIS Spread – The Euribor-OIS spread was unchanged last week at 11 bps. The Euribor-OIS spread (the difference between the euro interbank lending rate and overnight indexed swaps) measures bank counterparty risk in the Eurozone. The OIS is analogous to the effective Fed Funds rate in the United States.  Banks lending at the OIS do not swap principal, so counterparty risk in the OIS is minimal.  By contrast, the Euribor rate is the rate offered for unsecured interbank lending.  Thus, the spread between the two isolates counterparty risk. 

 

European Banking Monitor: More Good News Than Bad - w. euribor

 


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