US Bank and Broker Default Risk Levels

Below are price charts of 5-year credit default swaps for the six big US banks and brokers.  As shown, all six firms have seen an increase in default risk since the end of the first quarter.  JP Morgan (JPM) and Wells Fargo (WFC) -- the two firms with the lowest default risk at the end of Q1 -- have seen the biggest spikes since the second quarter began.  JP Morgan default risk is up the most at 52.31%, while Wells Fargo is up 46%.

Bank of America (BAC) and Citigroup (C) have seen the smallest jumps in default risk at roughly 30%, while Goldman Sachs (GS) and Morgan Stanley (MS) are both up roughly 42%.

Morgan Stanley still has the highest CDS price at 438 basis points (bps), followed by Goldman at 333 bps and Bank of America at 297 bps.  JP Morgan still has the second lowest default risk, while Wells Fargo remains the least risky with its CDS at 123 bps.

It's worth noting that default risk for all firms highlighted is still below the highs seen during the 2011 version of the Euro crisis, but we'd like to see these numbers much lower.