US CDS spreads soar, eurozone banks trade wider

The cost of credit protection on US financial institutions rocketed yesterday, while UK and European banks experienced declining market sentiment in early trading today.

Five-year senior credit default swap (CDS) spreads referencing the Royal Bank of Scotland widened to 151.9 basis points at 10:00am London time from 145.7bp at the close of trading yesterday. The bank's shareholders will vote later today on whether to accept £20 billion of capital as part of the UK Treasury's industry bail-out.

Spreads on HSBC, which cut a further 500 jobs in its Asian operations this week, widened to 114.9bp from 110bp. The cost of protection on Lloyds TSB - which received

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