Market hunts banks


The market is hunting banks:

ELIZA RONALDS-HANNON: We’re seeing widening CDS spreads in banks other than Credit Suisse, with the cost of Deutsche Bank and Barclays swaps hitting new highs. What is driving investors to seek protection so widely?

BOAZ WEINSTEIN: Until two weeks ago, we had no bank default or bailout of consequence since Lehman Brothers, and now we’ve had four occur in rapid succession with a fifth hanging in the balance. No matter what they’ve thrown at each situation, it hasn’t helped any bank actually stabilize and has led to full capitulation. So it seems there’s plenty of uncertainly still to play out in the market.

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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.