FINANCIAL INSTITUTIONSSECTOR IN-DEPTH 12 January 2016TABLE OF CONTENTS The market-implied ratings of fixed-income bank securities remained stable in the recent sell-off1Market-implied ratings tables for global banking regions and companies 3 Monthly Bank Risk Report: key CDS credit metrics4Appendix: Moodys Capital Markets Research - recent publications on finance sector16ContactsAllerton G. Smith 212-553-4058 Sr Dir-Sr Research Analyst allerton.smith@moodys.comABOUT CAPITAL MARKETS RESEARCHAnalyses from Moodys Capital Markets Research, Inc. (CMR) focus on explaining signals from the credit and equity markets. The publications address whether market signals, in the opinion of the groups analysts, accurately reflect the risks and investment opportunities associated with issuers and sectors. CMR research thus complements the fundamentally-oriented research offered by Moodys Investors Service (MIS), the rating agency.CMR is part of Moodys Analytics, which is one of the two operating businesses of Moodys Corporation. Moodys Analytics (including CMR) is legally and organizationally separated from Moodys Investors Service and operates on an arms length basis from the ratings business. CMR does not provide investment advisory services or products.View the CMR FAQ Contact the CMR team Follow us on TwitterMoodys Analytics markets and distributes all Moodys Capital Markets Research, Inc. materials. Moodys Capital Markets Research,Inc. is a subsidiary of Moodys Corporation. Moodys Analytics does not provide investment advisory services or products.For further detail, please see the last page.Bank Risk ReportThe Market-Implied Ratings of Fixed-Income Bank Securities Remained Stable in the Recent Sell-Off Market-implied ratings The Baa1 average CDS-implied rating on January 8 for the 11 US-bank CDS peer group we follow for this publication was unchanged from the level observed on December 1. The CDS-implied average ratings gap is -1 notch. The average CDS five-year mid-spread for this group widened from 65 bp on December 1 to 71 bp on January 8. However, the average CDS spread on January 8 was 2 bp tighter than the 73 bp of three months ago.The A3 average bond-implied rating on January 8 for the 37 US-bank bond peer group for this publication remained unchanged from December 1. The group maintains a zero notch average bond-implied ratings gap. Since December 1, 23 of the banks bond-implied ratings were unchanged, five banks experienced an improvement in their bond-implied rating. and no bank bond-implied rating worsened.Worldwide over the last 12 months the average bond-implied ratings and average CDS-implied ratings for the six regions we monitor in this publication have been quite stable, while there have been more volatile bond-implied ratings movements at individual banks. We anticipate that this trend will persist through the next several weeks as fourth-quarter financial results are announced.No region around the glob...
