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UK banks and sovereign Credit Default Swap Spreads

Bankruptcy risk measured by 5 years CDS 5 of the 4 major banks and UK government, (Source IMF).

¿What happens when the state has to save the major banks in a country?. Well very simple, the risk of bankruptcy of private banks is transferred to the entire country. Exactly as happened with Ireland, when Ireland government guaranteed all deposits from banks customers.

It’s a bottom up movement. In Spain, we are seeing the same effect more slowly.

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One Response to “UK banks and sovereign Credit Default Swap Spreads”

  1. Daily News About Subprime : A few links about Subprime - Sunday, 03 May 2009 03:50 Says:

    [...] UK banks and sovereign Credit Default Swap Spreads [...]

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