RBS' debt insurance hits record high

The cost of buying insurance on debt issued by the Royal Bank of Scotland has hit a record high as fears over bank funding return to plague markets.

Credit default swaps on RBS' subordinated debt closed at a new high of 662 basis points yesterday, higher than the last record set during the crisis in 2009. The previous high was seen in February 2009 when RBS' CDS hit 649 basis points, according to the Telegraph. The cost of insuring the majority state-owned lender's debt has sky-rocketed in recent weeks, having been trading at just 385 basis points a month ago. RBS share price has had a similar reversal of fortunes following a new wave of panic about the health of banks' balance sheets and their ability to fund themselves. In...