Australian banks now riskier than European

Wednesday, 17 May 2017

For the first time in a year, Australian banks are priced as more risky than those in Europe. The past week or so has has witnessed a collapse in European bank CDS prices, such that my usual proxy, French mortgage titan Credit Agricole, is now pricing CDS at 54bps, below CBA at 55bps:

Needless to say these levels of risk are actually very low for both, a part of the general collapse in global volatility.

Nonetheless, in relative terms, Aussie risk is again climbing:

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About the author

David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.