Titoli di Stato: la forbice si allarga

Disparities in the European government bond market increased to the most in at least 10 years after Moody’s Investors Service said it may downgrade some banks with units in Eastern Europe.

The difference between what Germany and Austria pay to borrow for 10 years widened to a record, while the gap between Greek and German 10-year yields increased to the most in a decade. Lenders from Austria, Italy, France, Belgium, Germany and Sweden account for 84 percent of western European bank loans in eastern Europe, Moody’s said.

East European banks, which are mainly subsidiaries of financial institutions such as Austria’s Raiffeisen Zentralbank Oesterreich AG, Italy’s UniCredit SpA and Paris-based Societe Generale SA, are likely to come under “downward pressure” which may also weaken their parent companies, Moody’s wrote in a report today in London.

The difference in yield, or spread, between the 10-year German bund, Europe’s benchmark government security, and the equivalent Austrian security was 129 basis points by 9 a.m. in London, from 120 basis points yesterday and 88 basis points a week ago. The average in the past 10 years is 15 basis points.

The difference in yield between 10-year Italian and German bunds widened to 163 basis points, from 155 basis points yesterday and 119 basis points a week ago.

Bloomberg.com