The Securities and Exchange Commission's (SEC) actions against Goldman Sachs have  sent  credit default swap spreads spiraling wider not only for Goldman, but  for  the entire banking  sector, according to Fitch Solutions.

According to Fitch, Goldman CDS widened 41% after the SEC's announced civil lawsuit against Goldman that alleged fraud relating to ABACUS 2007-AC1, a CDO that the bank structured and sold in 2007.

CDS liquidity for Goldman also spiked, according to the firm. increasing five regional percentiles higher in reflecting the growing uncertainty over the bank's credit condition.

"Goldman's CDS have not broken through a 'BBB' trading pattern since the credit market bottom,' said  Fitch Managing Director Jonathan Di Giambattista. "Considering that Goldman has ranked in the top 10% most  liquid names globally for the past five months, CDS market sentiment remains clearly divided about the firm's prospects."

The controversy surrounding Goldman spilled over to the broader banking sector, Fitch said. sending regional banking CDS spreads wider in North America (4.3%) and in Europe (1%).

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