In the latest global banking crisis, German multinational investment bank Deutsche Bank AG (NYSE: DB) signaled a red alert to investors on Friday. As of March 24, 12:06 p.m. CEST, Deutsche Bank shares traded around $8, down approximately 14 percent. Investors questioned the bank’s stability on Friday after the bank’s credit default swaps that insure against default shot to a four-year high.
According to market data provided by S&P Market Intelligence, Deutsche Bank’s credit default swaps (CDS) – a form of insurance for bondholders – shot up above 200 basis points (bps) – the most since early 2019 – from 142 bps just two days ago.
“Deutsche Bank has been in the spotlight for a while now, in a similar way to how Credit Suisse had been,” Stuart Cole, a head macroeconomist at Equity Capital, said. “It has gone through various restructurings and changes of leadership in attempts to get it back on a solid footing, but so far, none of these efforts appear to have really worked.”
Meanwhile, the bank decided to redeem its $1.5 billion Fixed to Fixed Reset Rate Subordinated Tier 2 Notes due in 2028.
Following today’s dip, Deutsche Bank shares are down approximately 29 percent in the past month and 31 percent YTD.
The troubles at Deutsche Bank came after Credit Suisse was bailed out from imminent collapse through government intervention. With three regional banks in the United States already collapsed, the fear of more bank runs could escalate in the coming weeks. As such, analysts anticipate Bitcoin price could rally further as demand for risky deflationary assets rises exponentially.
According to market data provided by Coingecko, Bitcoin price is up 1.7 per cent in the past 24 hours to trade around $28.2k.
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