The divergent horizons of credit and equity markets were on show last week, with credit spreads on bank debt securities widening in concert with trends on debt pricing worldwide. At the same time the prices of Australian banks' shares rallied hard in response to favourable profits from three of the five largest banks.For credit investors, the greatest shifts in pricing over the last week were among select sovereign credits. France and Germany saw the largest widening in credit default swap spreads, moving from 144 basis points and 74 bps, respectively, at the start of the week, to as wide as 168 bps and 86 bps, respectively. But it was the French banks that really felt the pain, and Societe Generale (thanks to  rumours over its financial position) felt it the most.Credit default swaps for Societe Generale opened the week at 214 bps, before moving as wide as 334 bps. BNP Paribas and Credit Agricole saw their spreads move from 182 bps and 216 bps to 238 bps and 216 bps, respectively.Ironically, while all this was going on, CDS spreads for Italy fell from 386 bps to 371 bps and those for Spain fell from 405 bps to 370 bps. Obviously, investors are (moderately) happy with the support being provided by the European Central Bank and are buying the bonds of these two countries but are concerned about the longer term ability of France and Germany to support the ECB and, later, the European Financial Stability Facility.There was a similar pattern to CDS movements in the United States. US sovereign credit risk apparently declined as its CDS spread fell from 57 bps to 54 bps over the week, but a number of big US banks were not so fortunate. Bank of America seems to be slowly sinking in a mortgage nightmare it has largely inherited rather than created. Its CDS spreads widened over the week from 204 bps to 315 bps.BoA's subsidiary, Merrill Lynch, saw a similar widening, from 217 bps to 332 bps. Morgan Stanley saw its spreads widen from 197 bps to 277 bps, while Citigroup fared slightly better, with a movement from 161 bps to 212 bps.As usual, Australia was caught up in all the shifts in the credit market. Credit default swap spreads on Australian sovereign risk widened 24 bps to 84 bps, and spreads for the Big Four banks widened by 40 bps to reach a peak of 172 bps. This is an indication of the credit spread the banks would have to pay to raise five-year debt now. Earlier in the year the banks could raise five-year funds at a spread of only 115 bps.Yields on Australian banks' five-year bonds increased by around 20 basis points over the course of last week, according Yieldbroker.On the other hand, the price of bank shares jumped, as Bendigo, National Australia Bank and Commonwealth Bank all reported half-yearly or quarterly profits.Shares in NAB increased by close 10 per cent over the week; shares in the other three major banks