Gap between implied and real ratings still evident
Credit default swap spreads for many banks continue to imply default risk greater than that shown by credit ratings, according to a senior analyst at Moody’s Analytics.
“My personal view is the market is still trading many banks cheaply,” says the divisional managing director of Moody’s Analytics capital market research group, David Munves.
He cited Citigroup as an example of a firm whose current CDS spreads do not reflect the true risk of default. During October, Citigroup’s average CDS price
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