Eurozone and US bank CDS spreads widen

UK and European financial institutions faced declining market sentiment in early trading today, while the cost of credit protection on US banks continued to rise.

Five-year senior credit default swap (CDS) spreads referencing the Royal Bank of Scotland widened to 140.7 basis points at 10:30am London time today from 136.7bp at the close of trading yesterday, ahead of a shareholder vote on the proposal to raise £20 billion of capital as part of the UK Treasury's industry bail-out.

Spreads on HSBC, which cut a further 500 jobs in its Asian operations yesterday, widened to 109.1bp from 108.7bp. The cost of protection on Lloyds TSB - which is seeking investor

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