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Sovereign, Bank Default Swap Indexes Rise to Records in Europe

The cost of insuring European sovereign and bank debt rose to records on speculation Germany is preparing for a default by Greece while French lenders may be downgraded because of their holdings of the country’s bonds.

The Markit iTraxx SovX Western Europe Index of credit-default swaps on 15 governments soared 17 basis points to 353 at 5:30 p.m. in London. The Markit iTraxx Financial Index linked to senior debt of 25 banks and insurers increased 14 basis points to 314 and the subordinated index jumped 15 to 550, according to JPMorgan Chase & Co.