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 Woman and two children killed by mob in riots over 'blasphemous' Facebook post in Pakistan
- 2 Christians: The world's most persecuted people
- 3 The secret report that helps Israelis to hide facts
- 4 Danish TV reporter is all business up top, all party down below
- 5 Denmark bans kosher and halal slaughter as minister says ‘animal rights come before religion’
Woman and two children killed by mob in riots over 'blasphemous' Facebook post in Pakistan
Israel-Gaza conflict: The children were playing in the street with toy guns. The missiles were tragically real
Danish TV reporter is all business up top, all party down below
Syria conflict: Syrian and Turkish Kurds unite to battle Isis threat - ‘We shoot them like sheep, but next day double the number return’
Ross Burden dead: MasterChef and Ready Steady Cook star, dies aged 45
The secret report that helps Israelis to hide facts
A day in the life of Vladimir Putin: The dictator in his labyrinth
Were 'Poor Doors' added to mixed developments so wealthy residents don't have to go in alongside social housing tenants?
A new Russian revolution: The cracks are starting to appear in Putin’s Kremlin power bloc
Arizona execution lasts two hours as killer Joseph Wood left 'snorting and gasping' for air
Opponents of Israel's military operation in Gaza are the real enemies of Middle Eastern peace
iJobs Money & Business
Data Governance Manager (Solvency II) – Contract – Up to £450 daily rate, 6 month (may go Permanent)
£350 - £450 Per Day: Clearwater People Solutions Ltd: We are currently looking...
£500 - £560 per day: Orgtel: Java Developer FX - Banking - London - Up to £560...
£350 - £400 per day + competitive: Orgtel: My client, a leading bank, is curre...
£26000 - £30000 per annum + Benefits: Ashdown Group: Account Manager - (Produc...