DB: Deutsche Bank Shares Drop as Concerns Mount

Germany’s largest lender is under fire after the price of its credit default swaps spiked to a four-year high.

• Deutsche Bank shares tumbled nearly 12% in Frankfurt on Friday after the struggling lending giant sparked fears that it’s getting more expensive to protect it from default. US-listed shares of the German bank skittered down about 6% as investors were quick to react to any trouble.
• Deutsche’s credit default swaps, which act like insurance for its corporate bonds, rose to a four-year high. In practice, this means that a buyer of that product pays a higher fee to hold it, indicating that it’s more costly now to protect the bank’s debt against the risk of default.
• In the fallout from Credit Suisse’s collapse, analysts are eager to draw many comparisons with Deutsche Bank. To ease concerns, the European Central Bank told everyone that the sector is resilient and pumped rates further. Deutsche Bank’s stock is down more than 20% this year.