Deutsche Bank’s Woes

Deutsche Bank’s Woes

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  • Friday saw Deutsche Bank's stock prices fall as the cost of insuring the bank's debt against the possibility of default rose to its highest levels in more than four years, raising worries among investors regarding the financial stability of European banks.
  • Deutsche Bank's stocks have dropped drastically this month, falling by as much as 14.9% on Friday and reaching their lowest in five months at 8.13 euros ($9.16). In the last week, the bank has seen its market value decrease by $3 billion. Additionally, the bank's credit default swaps (CDS) have risen to 220 basis points (bps), the highest since late 2018, after being at 142 bps only two days ago, according to S&P Market Intelligence.

Why it matters

The last week has been a trying one for the banking sector of the region, where a rescue from the state was needed for Credit Suisse and U.S. banks in the area faced turmoil, further worrying investors about the stability of the banking industry worldwide. Prices of credit default swaps (CDS) for major European banks went up on Friday, showing that investors were not keen on taking any risks with their portfolios leading up to the weekend.


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