Benzinga - Just as sanity was returning in the banking space amid governments’ handholding, the turmoil in the credit default swaps of German banking giant Deutsche Bank AG (NYSE: DB) has reignited contagion risk.
What Happened: The German bank’s credit default swaps, which represent insurance protection for its bondholders against a potential default, spiked 200 basis points, the highest since early 2019, Reuters said, citing data from S&P Market Intelligence.
The prospect of another banking collapse could spell disaster following three banks going under in the U.S., a big bank being bailed out in Europe and more regional U.S. banks potentially facing issues.
All U.S. big banking stocks and regional banks showed knee-jerk reactions to the predicament facing Deutsche Bank.
According to Benzinga Pro data, in premarket trading:
- JPMorgan Chase & Co. (NYSE: JPM) fell 1.99% to $ 124.31.
- Bank of America Corp. (NYSE: BAC) declined 2.60% to $ 26.27.
- Citigroup (NYSE: C) moved down 2.76% to $ 42.25.
- Morgan Stanley (NYSE: MS) Plunged 1.96% to $ 84.16.
- Goldman Sachs Group Inc. (NYSE: GS) lost 2.08% to $ 308.31.
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