The $5.4mn Bet that Caused Deutsche Bank's Global Rout.
TL;DR Summary
Regulators are investigating a €5 million bet on Deutsche Bank's credit default swaps that may have triggered a global sell-off on Friday. The illiquidity of the contracts means that a single bet can cause significant market moves. The suspected knock-on effect was a rout that sent banking stocks tumbling, government bonds higher, and CDS prices for lenders soaring, trimming about €1.6 billion off Deutsche Bank’s market value and more than €30 billion off an index that tracks European banking stocks.
Topics:business#credit-default-swaps#deutsche-bank#finance#global-sell-off#market-volatility#regulators
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