For all of John Cryan’s efforts to reassure investors that Deutsche Bank AG is “rock solid,” credit markets are still signaling plenty of concern.
The cost of insuring against losses on Deutsche Bank’s debt is 69 percent higher than the average for 12 of its biggest peers. While that’s less than it was in February, the gap shows investors are still singling out the bank after worries emerged earlier in the year that declining profitability will erode its ability to keep paying coupons on its riskiest bonds. It’s also showing the difficulty of reversing the effects of a derivatives market where a rapid rise in credit-default swap prices can fuel even more hedging by the firms that trade with the bank.
