Credit Risk in the Banking sector as evident by wider spreads, is higher today as Financial Reform edges closer. As the negotiations occur in the Senate, investors are concerned that financial reform may curb future revenue and growth prospects.
In addition, Goldman faces more pressure today as reports surfaced of the company taking advantage of clients before the collapse of the housing market. Bloomberg reported that Goldman Sachs Bankers Said ‘Anything’ to Get High Rating, S&P Ex-Analyst Says. On April 16, the SEC alleged in a report that the Wall Street giant defrauded investors by misstating and omitting key facts about a financial product tied to subprime mortgages as the U.S. housing market was beginning to falter.
Also, the U.S. Treasury may begin to sell its $7.7 billion Citigroup Shares. The Treasury acquired the shares when it gave Citigroup a $45 billion bailout package during the financial crisis.
Below is a snapshot of the 5-Year Credit Default Swaps Market for the Bank Sector (Data provided by Bloomberg):
| Reference Entity |
|
|
5Yr CDS |
Change |
Time |
| |
|
|
|
|
|
|
| American Express |
|
|
83.9 |
+3.3 |
14:12 |
| BBVA |
|
|
|
188.8 |
+13.6 |
14:12 |
| BNP Paribas |
|
|
92.3 |
+6.3 |
14:12 |
| Banco Santander |
|
|
167.9 |
+12.1 |
14:12 |
| Bank of America |
|
|
159.8 |
+11.6 |
14:12 |
| Barclays |
|
|
|
103.6 |
+2.3 |
14:12 |
| Citigroup |
|
|
183.3 |
+14.9 |
14:12 |
| Commerzbank |
|
|
90.5 |
+3.6 |
14:12 |
| Credit Agricole |
|
|
120.9 |
+8.0 |
14:12 |
| Credit Suisse |
|
|
92.2 |
+3.7 |
14:12 |
| Deutsche Bank |
|
|
119.3 |
+5.0 |
14:12 |
| Goldman |
|
|
|
164.9 |
+20.8 |
14:14 |
| HSBC Bank PLC |
|
|
72.0 |
+1.5 |
14:14 |
| ING |
|
|
|
89.5 |
+1.7 |
14:13 |
| JPMorgan |
|
|
87.1 |
+5.5 |
14:13 |
| Lloyds TSB |
|
|
142.1 |
+2.9 |
14:13 |
| Morgan Stanley |
|
|
180.3 |
+18.0 |
14:13 |
| Nomura |
|
|
|
106.5 |
N.A. |
14:13 |
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Credit Risk Higher for Banking Sector
Credit Risk in the Banking sector as evident by wider spreads, is higher today as Financial Reform edges closer. As the negotiations occur in the Senate, investors are concerned that financial reform may curb future revenue and growth prospects.
In addition, Goldman faces more pressure today as reports surfaced of the company taking advantage of clients before the collapse of the housing market. Bloomberg reported that Goldman Sachs Bankers Said ‘Anything’ to Get High Rating, S&P Ex-Analyst Says. On April 16, the SEC alleged in a report that the Wall Street giant defrauded investors by misstating and omitting key facts about a financial product tied to subprime mortgages as the U.S. housing market was beginning to falter.
Also, the U.S. Treasury may begin to sell its $7.7 billion Citigroup Shares. The Treasury acquired the shares when it gave Citigroup a $45 billion bailout package during the financial crisis.
Below is a snapshot of the 5-Year Credit Default Swaps Market for the Bank Sector (Data provided by Bloomberg):