Broker Review Contents
What is the share price of Deutsche Bank?
The Deutsche bank stock is plunging today, and it has dropped over 13% today. Traders are once again concerned about the stability of the European banking system. European banking stocks had brief respite this week when UBS was forced to buy Credit Suisse but today all of that seems to be evaporating.
Deutsche bank’s shares have been dropping for the past three days and investors have been paying attention to this as Deutsche bank has lost almost a fifth of its value so far this month.
Why is Deutsche bank share price falling?
Deutsche bank unexpectedly announced that it wants to redeem its tier 2 subordinated bonds in order to assure depositors that their deposits are safe. However, the panic really emerged in its AT1 bonds- an asset class that became very popular this week after Credit Suisse’s AT1 was written down as part of the rescue deal; the yield started to blow out of proportion and this lead to a massive sell-off in the Deutsche share price.
The banks’ Credit Default Swap—which basically measures how riskier the bank is in terms of its insurance, have skyrocketed today to 173 points which is considered as a terrifying level.
Is this a new financial crisis?
Well, if one looks at the Credit Default Swaps for the European banks, they are only a bit shy of the levels that we saw back during the European financial crisis. Currently, they are above the level that we experienced during the global financial crisis. This indicates that something serious is brewing up, and we could see a lot more trouble for the stocks in the coming days.
Are all European Banks falling?
Most of the European banks are currently under immense pressure and something that we need to pay attention to is their credit default swaps which have started to rise. For instance, CDS for BNP, Commerzbank, Societe Generale, UBS have started to climb once again. German rival Commerzbank shed 9%, while Credit Suisse, Societe Generale, and UBS each fell by more than 7%. Barclays and BNP Paribas both dropped by more than 6%.