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Editor's Note: This is a complimentary research note from Hedgeye Analyst Matthew Hedrick published on March 10, 2014 at 12:00 PM. 

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 sales@hedgeye.com. And, for more information on our services, click here.

European Banking Monitor: Russia The Big Mover | $RSX - 3 13 2014 12 11 10 PM

European Financial CDS - The big mover in European swaps last week was Sberbank of Russia, which widened 72 bps to 286 bps from 214 bps. Russia's largest bank has often been a good indicator on geopolitical as well as commodity pressures. Elsewhere across Europe, the Financials were much more sanguine with broad-based improvement.

European Banking Monitor: Russia The Big Mover | $RSX - zz. banks

Sovereign CDS – Sovereign swaps were tighter across the globe last week with the sole exception of the US, where swaps were unchanged at 30 bps. Europe put up broad-based improvement in spite of turmoil in peripheral Ukraine.

European Banking Monitor: Russia The Big Mover | $RSX - z. sov1M

European Banking Monitor: Russia The Big Mover | $RSX - z. sov2

European Banking Monitor: Russia The Big Mover | $RSX - z. sov3

Euribor-OIS Spread – The Euribor-OIS spread tightened by 3 bps to 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: Russia The Big Mover | $RSX - z. euribor

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