Deutsche Bank is not Lehman and this is not 2008, Lex says ...

That’s was the word on Wednesday from the corporate finance wonks at the Financial Times’s Lex column.

Prices on credit default swaps for banks’ subordinated debts, a type of financial derivative used by fund managers to insure against debts not being repaid, had risen by two-thirds thus far in 2016, as per Markit’s iTraxx index.

Trading volumes had also increased by more than a fifth compared to where they stood one year ago.

Even so, volumes were still low by historical standards, the tipsters judged.

Furthermore, it can be “tricky” to buy CDSs for a specific lender, so buyers tend to buy baskets of them, pushing up the entire index.

Prices on CDs also looked “high” Lex said.

An actual default on a conventional bond was unlikely, Lex added. European banks would first have to eat through about $283bn of shareholders’ equity raised since 2008.

So while the past week may have felt ‘dicey’, “this is not 2008 – and Deutsche is not Lehman,” Lex said.