CDS tied to bank bonds show investors' concerns are easing

07/11/2010 | Bloomberg

Costs of insuring banks' debt from default have dropped to their lowest levels in eight weeks, indicating that bond investors are less concerned that financial institutions will be unable to survive Europe's sovereign-debt crisis. "There was a fear the financial system would collapse," said Philip Gisdakis, a strategist at UniCredit. "There's a high probability the stress tests will show the core of the financial system is healthy and sound in the sense it can weather the storm. Some banks might need to raise more capital."

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