I exploit the price differential of CDS contracts written on debts with different seniority to measure the implicit government guarantees enjoyed by European financial institutions over the period 2005-2013. The guarantee increases substantially during the global subprime crisis and peaks at an average of 89 basis points in September 2011. Implicit support is higher for banks than insurance companies. My analysis suggests that Eurozone financial firms benefit more from such guarantees than their non-Eurozone counterparts within the European Union. On one hand, the aggregate guarantee implicitly offered by a government positively “Granger causes” the sovereign’s default risk. On the other hand, the analysis reveals two offsetting effects from sovereign default risk on the implicit guarantee. Furthermore, I also find evidence that the phasing in of Basel III rules does not appear to have reduced the guarantees available to major financial institutions in Europe.