Money markets ease again but recovery remains muted
Tensions in the money markets eased again yesterday, suggesting that the co-ordinated global attempts to tackle the credit crisis may finally be having some success though, as with world stock markets, the improvement was marginal.
Libor, the rate at which banks lend to each other – and thus considered an important measure of the logjam in the credit market – fell for three-month lending in all currencies, the British Bankers Association said, but the reduction was small. The three-month sterling Libor rate, for example, fell from 6.27 per cent to 6.25 per cent.
Indicators of perceptions of risk in the money markets, such as the Libor/OIS index and the TED spread also fell yesterday.
However, Zach Witton, an analyst at Moody's ratings agency, said: "Tuesday's easing is welcome news, but money market rates remain high."
There has been come disappointment that pledges by European governments to flood the system with €2trn worth of loans, guarantees and equity has not yet had more dramatic results. The impact of the US's $700bn rescue plan has been similarly modest.
However, Padhraic Garvey, a strategist at ING bank, said: "Every day that Libor falls is a better day for the banking system – I don't think we will get a complete resolution to the Libor story for some time, but I would take a couple of basis points every day."
Gains on world stock markets were similarly muted. London's FTSE 100 index rose by a little more than 3 per cent yesterday, having been up by more than 5 per cent at one stage. The Dow Jones index in the US opened 400 points higher, almost 4 per cent up on the day before, but later fell back and the industrial average closed down 76.6 points at 9,310.99.
- 1 Half of young women unable to ‘locate vagina’ and 65% find it difficult to say the word
- 2 Perez Hilton apologises for Jennifer Lawrence naked photo leak
- 3 A teacher speaks out: 'I'm effectively being forced out of a career that I wanted to love'
- 4 Mexican woman becomes world’s 'oldest person' at 127
- 5 Jennifer Lawrence 'naked sex video' will be leaked threatens 4Chan celebrity photo hacker
iPhone 6 'hidden code' could indicate sharper screens or bigger phones
Perez Hilton apologises for Jennifer Lawrence naked photo leak
Ariana Grande nude photos leak: 'These are completely fake' say singer's representatives
A teacher speaks out: 'I'm effectively being forced out of a career that I wanted to love'
Kate Upton nude pictures leak: Model's representatives 'looking into' authenticity of naked images
Rotherham child sex abuse scandal: Labour Home Office to be probed over what Tony Blair's government knew - and when
Robin Williams Emmys tribute led by Billy Crystal criticised for including 'racist' joke about Muslim woman
The Rotherham child abuse scandal is a tale of apologists, misogyny and double standards
What do immigrants really think of Britain? Polish immigrant's Reddit post goes viral
Do you realise just how foolish the UK looks?
Ashya King: Parents of five-year-old boy refused permission to visit him in hospital and denied bail at Spanish court
iJobs Money & Business
£40000 - £50000 per annum + benefits+bonus+package: Harrington Starr: SQL Impl...
£85000 per annum: Harrington Starr: Head of IT (Windows, Server, VMware, SAN, ...
£40000 - £50000 per annum: Harrington Starr: You will not be expected to hav...
£500 per day: Harrington Starr: SQL DBA/Developer SQL, C#, VBA, Data Warehousi...