CDSs on US banks widen on fears of auto bankruptcies
The cost of credit protection on US banks increased yesterday, following the Obama administration's warning that it would let the US auto industry slide into bankruptcy if necessary.
Citi was worst hit, with five-year senior credit default swap (CDS) spreads referencing the bank jumping more than 35 basis points, from 598.4bp at close of trading on Friday to 633.6bp at close yesterday. Bank of America - which, like Citi, has taken $45 billion in capital from the US government's Troubled Assets Relief Program- saw its CDSs widen from 379.4bp to 400.7bp, while CDSs referencing San Francisco-based Wells Fargo moved out to 301.8bp from 270.8bp.
Elsewhere, CDSs referencing
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