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Fitch Solutions: European Banking Sector CDS Tighten in August

September 4, 2014

NEW YORK--(BUSINESS WIRE)-- Five-year credit default swaps (CDS) on the European banking sector have tightened significantly over the past month following a bout of widening earlier this summer, according to Fitch Solutions in its latest case study.

"On average, CDS on European banks have come in 12% over the past month, outpacing the broader region, for which spreads moved 6% tighter over the same time period," said Diana Allmendinger, Director, Fitch Solutions.

Banks domiciled in Spain, Portugal and Italy were at the forefront of the tightening, firming 26%, 25% and 22%, respectively over the past month.

"Based on our CDS Indices, the market is no longer singling out the European financials industry as it had in recent years, with the spread differential between the financials and corporates indices less than 10 basis points, compared to 60 basis points a year ago," added Allmendinger.

Fitch Solutions case studies build on data from its CDS Pricing Service and proprietary quantitative models, including CDS Implied Ratings. These credit risk indicators are designed to provide real-time, market-based views of creditworthiness. As such, they can and often do reflect more short term market views on factors such as currencies, seasonal market effects and short-term technical influences. This is in contrast to Fitch Ratings' Issuer Default Ratings (IDRs), which are based on forward-looking fundamental credit analysis over an extended period of time.

Additional information about Fitch Solutions' products is available at

Fitch Solutions, a division of the Fitch Group, focuses on the development of fixed-income products and services, bringing to market a wide range of data, analytical tools and related services. The division is also the distribution channel for Fitch Ratings content.

Fitch Ratings and Fitch Solutions are part of the Fitch Group, a jointly-owned subsidiary of Fimalac, S.A. and Hearst Corporation. For additional information, please visit ''; ''; '' and ''.

Fitch Ratings

Diana Allmendinger


+1 212-908-0848

Fitch Solutions

33 Whitehall Street

New York, NY 10004


Media Relations

Peter Fitzpatrick, London, +44 20 3530 1103

Sandro Scenga, New York, +1 212-908-0278

Source: Fitch Solutions

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