Visual of the 5yr CDS for BoA, MS, Dexia, Soc Gen, Banco Popular and Unicredit
Credit default swaps are contracts designed to insure creditors against a bank (or indeed any company) going bust.
A CDS is a contract issued by big City firms or fund that guarantees the holder will be covered if a particular company defaults on its debts. It is basically a type of insurance used by large investing institutions.
Bank funding stress threatens Europe credit crunch - Huw van Steenis, analyst at Morgan Stanley
The risk of a credit crunch in southern Europe is rising as banks face stress in their medium- to long-term funding, forcing some to shrink their lending, analysts said on Monday. European banks were rocked last week by concern about a squeeze for short-term funding, with tougher and more costly financing and a retreat by US money market funds prompting lenders to turn to the European Central Bank (ECB) for more cash. France's banks were hit particularly hard.

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