FINANCIAL INSTITUTIONSSECTOR IN-DEPTH 5 NOVEMBER 2015TABLE OF CONTENTSUS Bank CDS Market Signals Advance; European Bank Market Signals Slip Lower1Market-implied ratings tables for global banking regions and companies 4 Monthly Bank Risk Report: key credit metrics: CDS, bonds5Appendix: Moodys Capital Markets Research recent publications on the finance sector18ANALYST CONTACTSAllerton 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 ReportUS Bank CDS Market Signals Advance; European Bank Market Signals Slip Lower By Allerton (Tony) SmithThe recovery of financial markets around the globe in October held generally positive implications for most bank credit spreads. Yet, in most regions the credit market instruments for the banks performed in line with the broad markets, as indicated by the limited number of changes in market-implied ratings around the globe. There were only a few better moves in the regional market-implied ratings gaps.The most significant favorable exception to the broader global pattern was the average CDS-implied rating for banks domiciled in the USA. Over the last year, the CDS-implied rating for the 11 US banks we monitor in this publication remained stubbornly at Baa1 until October, when the average moved up to A3. Six of the banks outperformed the broad market in October and enjoyed an improvement in their CDS-implied ratings. The CDS-implied ratings range between A1 at American Express and Baa2 at Citigroup and Goldman Sachs. All the banks experienced a tightening in their CDS five-year mid-spreads in the month. The average CDS spread moved tighter by 18%, from 77 bp one month ago to 63 bp. One of the drivers of the progress was the publication of new bank capitalization rules for total loss absorbing capital (TLAC) for major banki...
