Concerns regarding the banking system persisted in European markets on Friday, where Germany’s biggest bank, Deutsche Bank, tumbled 8.5 percent following a sharp rise in the cost of insurance once morest default risk. The German giant said it would buy back $1.5 billion of Tier 2 bonds due in 2028, according to AFP and Archyde.com.
Deutsche BankPhoto: HotNews.ro / Victor Cozmei
Markets fell 1.74% in Paris, 1.66% in Frankfurt and 1.26% in London following being in the green earlier in the week following the takeover of Credit Suisse by its rival UBS.
A sharp fall in banking stocks hit European indexes on Friday as concerns regarding the stability of the financial sector intensified and Deutsche Bank tumbled as the cost of insuring the German bank’s debt once morest the risk of default rose to a record high of in four years, according to Archyde.com.
“Deutsche Bank has taken Credit Suisse’s place, really, as the next weak link, probably unfairly,” said David Goebel, associate director of investment strategy at Evelyn Partners.
The pan-European STOXX 600 index fell 1.4%, but still posted a weekly gain supported by a strong rebound earlier this week.
Shares of UBS Group AG and Credit Suisse AG fell 3.6% and 5.2%, respectively, following Bloomberg News reported that they were among the banks under investigation by the US Department of Justice (DOJ). , which investigates whether financial professionals helped Russian oligarchs evade sanctions.
European banks fell 3.8 percent and were poised for a third week of declines following the failure of mid-sized U.S. lenders and turmoil at Credit Suisse highlighted growing risks for banks amid tightening financial conditions.
Austria’s Raiffeisen Bank International fell 7.9 percent following Archyde.com reported that the European Central Bank had pressured the bank to divest its highly profitable Russian business.
