Financial Biz Cheat Sheet: Insurers Pay Out $70B in Claims in First Half, European Banks Decline After Stark Exits ECB
Concern over Greek debt has CDS spreads on the debt of major U.S. and European Banks climbing. CDS spreads are up 7% today for Bank of America (NYSE:BAC) and Goldman Sachs (NYSE:GS). CDS spreads on Citigroup (NYSE:C) and Morgan Stanley (NYSE:MS) are up 6%, while the spread on JPMorgan (NYSE:JPM) is up 5%.
European bank stocks were hit this morning by Jurgen Stark’s resignation from the executive board of the European Central Bank. The biggest decliners were Barclays (NYSE:BCS), Deutsche Bank (NYSE:DB), Royal Bank of Scotland (NYSE:RBS), and Credit Suisse (NYSE:CS). American banks were hit to a lesser extent.
Merrill Lynch (NYSE:BAC) began laying off several hundred employees yesterday in long-awaited cuts that will fall across the entire organization. Reports have top Bank of America executives discussing the possible elimination of tens of thousands of jobs.
Bank of Nova Scotia (NYSE:BNS) has announced its plan to buy a 19.99% stake in state-owned Chinese lender Bank of Guangzhou for $727 million. Bank of Guangzhou is China’s 29th largest lender.
Natural disasters cost the global insurance sector $70 billion during the first half of 2011, making this year the second-most expensive year, next to 2005, in over 40 years. Total losses during the first half, both insured and insured, were almost $278 billion. Insurers like Progressive (NYSE:PGR), Allstate (NYSE:ALL), Travelers (NYSE:TRV), Chubb Corp. (NYSE:CB), and 21st Century (NASDAQ:TCHC) are all trading lower today on the news.
Don’t Miss: U.S. Mortgage Rates Fall to Record Lows
A judge has widened the scope of an antitrust lawsuit against Blackstone (NYSE:BX), KKR (NYSE:KKR), and nine other private-equity firms over the alleged rigging of large takeovers. The lawsuit initially covered 17 deals, but the judge’s decision will allow plaintiffs to seek information for 10 more, including the $44 billion acquisition of TXU.