Shares of Deutsche Bank are slumping on the latest sign of banking concerns

Last updated: March 24, 2023 at 5:39 am ET

First published: March 24, 2023 at 5:10 a.m. ET

Shares of Deutsche Bank slumped on Friday, throwing the spotlight on the health of another globally systemically important bank heading into the weekend.

Shares of German lender XE:DBK fell 8% in Frankfurt trading and the Euro Stoxx banking index XX:SX7E fell 4%.

Deutsche Bank’s 5-year credit-default swaps were extended Thursday, in what Reuters reported…

Shares of Deutsche Bank slumped on Friday, throwing the spotlight on the health of another globally systemically important bank heading into the weekend.

The shares of the German lender

DBK

fell 8% in Frankfurt trading and the Euro Stoxx banking index

SX7E

down 4%.

Deutsche Bank’s 5-year credit-default swaps expanded on Thursday, marking the largest one-day increase in its history, according to Reuters.

It should be noted that Deutsche Bank’s 5-year credit-default swap, which reached 175 on Thursday, is nowhere near the peak for Credit Suisse, which reached 1,194, according to data from S&P Global. The higher the value of the CDS, the more likely the market is to see the issuer default.

Deutsche Bank’s AT1 bonds plummeted after Switzerland wiped out Credit Suisse’s

CSGN

securities in the deal for acquisition by UBS

UBSG

.

Invesco AT1 Capital Bond UCITS ETF

AT 1

,
investors in these convertibles are down 18% this month as investors lose confidence in the securities. European and other banking regulators around the world have insisted that they will not follow Swiss precedent and first allow banks’ equity to drop to zero before wiping out convertibles in the event of a failure.

UBS

UBS

also feels the stress in a deal that banks say may not close this year. UBS shares fell 5%.

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