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Bank Default Swaps at Record High as Fed Boost Bets Evaporate

Credit-default swaps insuring bank debt rose to a record in Europe as investors pared bets the Federal Reserve will pledge a third round of stimulus measures to boost the U.S. economy.

The cost of contracts on the Markit iTraxx Financial Index of swaps linked to senior debt of 25 banks and insurers climbed 4 basis points to 255, according to JPMorgan Chase & Co. at 5:30 p.m. in London. The subordinated index was up 15 at an all-time high of 460, based on closing prices.