Credit Suisse default swaps 18x UBS Group AG, 9x Deutsche Bank

The cost of insuring the bonds of Credit Suisse Group AG against default in the near-term is approaching a level that typically signals serious investor concerns.
 
One-year credit default swaps for the embattled Swiss lender were indicated at 835.9 basis points on Tuesday’s close of business, based on pricing source CMAQ. Other pricing sources point to a further rise on Wednesday, while a level of 1,000 would indicate serious concern.
 
The current level is about 18 times the one-year CDS for rival Swiss bank UBS Group AG, and about 9 times the equivalent for Deutsche Bank AG.
 
The CDS curve is also deeply inverted, meaning that it costs more to protect against an immediate failure at the bank instead of a default further down the line. The lender’s CDS curve had a normal upward slope as recently as Friday. Traders typically ascribe a higher cost of protection over longer, more uncertain periods. Shares hit a new record low Wednesday after the bank’s top shareholder ruled out providing more financial assistance to the struggling Swiss bank, citing regulatory constraints.