Banking Turmoil Eases, Global Stocks and European Banks Rally

European bank shares rebounded from four-month lows after UBS rescued Credit Suisse, but bank bonds remained under pressure after the merger deal wiped out some bondholders. The Swiss authorities' handling of the Credit Suisse rescue has upended the markets' expectation that shareholders would take a bigger hit than bond investors in such a scenario. The write-down to zero at Credit Suisse will produce the largest loss in the $275 billion AT1 market to date, dwarfing the 1.35 billion euros ($1.44 billion) bondholders of Spain's Banco Popular lost in 2017.