DEVELOPING: Deutsche Bank Stressed… Shares Tumble

Deutsche Bank’s shares tumbled for the third day in a row on Friday after a spike in credit default swaps, CNBC reported.

The German lender’s shares fell 11% on Friday as the cost of insuring against its default spiked.

The European banking system is stressed.

Swiss regulators on Saturday raced to seal a deal before Credit Suisse collapsed amid fears of banking contagion.

UBS, Credit Suisse and Swiss bank regulators worked to reach a deal to prevent a collapse.

UBS agreed to buy Credit Suisse for $3.2 billion, the Financial Times reported.

UBS’s Kelleher said the deal is NOT subject to shareholder approval during Sunday’s press conference on Sunday.

CNBC reported:

Deutsche Bank shares fell by more than 11% on Friday following a spike in credit default swaps Thursday night, as concerns about the stability of European banks persisted.

The German lender’s Frankfurt-listed shares retreated for a third consecutive day and have now lost more than a fifth of their value so far this month. Credit default swaps — a form of insurance for a company’s bondholders against its default — leapt to 173 basis points Thursday night from 142 basis points the previous day.

Deutsche Bank’s additional tier-one (AT1) bonds — an asset class that hit the headlines this week after the controversial write-down of Credit Suisse’s AT1s as part of its rescue deal — also sold off sharply.

Deutsche led broad declines for major European banking stocks on Friday, with German rival Commerzbank shedding 9%, while Credit Suisse, Societe Generale and UBS each fell by more than 7%. Barclays and BNP Paribas both dropped by more than 6%.

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