US Bank Default Risk Rises; European Bank Default Risk Falls

As global financial stocks have fallen significantly over the last week, you would think default risk has risen as well. However, while default risk has risen significantly for US banks and brokers, it has actually fallen for the European firms. Below we highlight a table of the percent change in equities and default risk over the last week for 15 global financial firms. As shown, Lehman's default risk has risen the most, followed by Wachovia, Washington Mutual, Merrill Lynch and Morgan Stanley. On the other hand, it has fallen 18.68% for Deutsche Bank, 16.85% for Credit Suisse, 13% for UBS, 10% for HSBC, and 3.5% for Barclays. At least things are calming down somewhere.