Concern About LIBOR
The latest sign that credit turmoil is far from over: Major banks have hoisted the rate on their short-term loans to each other, known as the London Interbank Offered Rate, or LIBOR.
The banks are hoarding money in case they have to make big loans to strapped customers with lines of credit. On top of that, they are worried that the borrowing banks might not pay them back.
During September, the 30-day dollar LIBOR rate shot up to its highest spread over the federal funds rate since December 31, 1999.
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The banks are hoarding money in case they have to make big loans to strapped customers with lines of credit. On top of that, they are worried that the borrowing banks might not pay them back.
During September, the 30-day dollar LIBOR rate shot up to its highest spread over the federal funds rate since December 31, 1999.
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posted by Bob Moser at
9:42 PM
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