Risks increasing at Morgan Stanley?

3 October 2011

Morgan Stanley is being viewed as an increasingly risky body with regards to credit default swaps (CDS).

Bloomberg reports that the organisation - owner of the biggest retailer brokerage in the world - is being priced as less creditworthy than most banks located in the US, UK and France.

Furthermore, its risk is being placed on a similar scale to that seen in the largest institutes in Italy.

Part of the reason for the movement is the increasing costs involved when purchasing CDS, serving to offer protection for the next half-decade against a default by the New York-based lender - which has been serving as a financial advisor to investors, governments and companies since 1935 - on its debt.

Brad Hintz, an analyst at Sanford Bernstein and Co, said: "The CDS spreads are making investors and creditors nervous."

Such a rise in price has come despite the firm seeing its shares go up over the last week.

By Asim Shah

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