Commerzbank credit protection costs double in a week
The cost of credit protection for Commerzbank has nearly doubled over the last week. The widening follows rumours of large credit derivatives trading losses at the German bank and a cut in its long-term credit rating from A to A- yesterday from Standard & Poor’s. Five-year senior credit default swaps for Commerzbank are now trading at around 215bp, bid-only.
However, S&P said its action did not relate to recent market concerns about the bank's capital ratios or liquidity, which it said were "unfounded".
The
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