Question about CDS's and Bond Yeilds?

Discussion in 'Economics' started by ER9, Dec 4, 2011.

  1. ER9


    I just want to know if I have the basic crux understood.

    If banks holding European debt are unsure their risk will be covered through CDS's they will attempt to raise capitol via Bonds. They basically offer bonds at higher yields to make them more attractive driving up yield % causing a spike in yields?
  2. No...