US bank credit default swaps jump

The Financial Times reports:

Investors paid record amounts to protect themselves against the risk of default by Bank of America on Wednesday, as fears grow over US banks’ exposure to the eurozone debt crisis.

Credit default swaps on BofA, a form of protection against default, rose as high as 495 basis points – or $495,000 a year to insure $10m of BofA debt over five years, according to Markit, the data provider. That compares with the previous high of 456bp on October 4 and a recent low of 300bp in late October.