Sunday, Aug 26, 2007
The big banks are struggling ...
Telegraph: Loans block up London banking
Although an air of calm has descended on equity markets, the short-term money markets remain chaotic say senior bankers, who warn that the market for asset backed commercial paper (ABCP) - loans that typically last between 60 and 90 days - has ground to a halt. Problems in the ABCP markets have forced the restructuring of a number of credit vehicles linked to Barclays Capital. HBOS last week refinanced its ABCP vehicle, owing to the liquidity issues in the market. One analyst said: "With banks still struggling with liquidity, and short-term lines nearing capacity, I expect to see five-year or 10-year bonds issued in sterling or euros by big, cash-starved banks in the coming days or weeks."
Posted by uncle chris @ 07:36 AM (479 views) Add Comment
2 Comments
- If you do not have an admin password leave the password field blank.
- If you would like to request a password allowing you to add comments and blog news articles without needing each one approved manually, send an e-mail to the webmaster.
- Your email address is required so we can verify that the comment is genuine. It will not be posted anywhere on the site, will be stored confidentially by us and never given out to any third party.
- Please note that any viewpoints published here as comments are user's views and not the views of HousePriceCrash.co.uk.
- Please adhere to the Guidelines
1. planning4acrash said...
Is the Libor rate reflected in mortgages?
2. planning4acrash said...
I just looked at the Times article below this one about Savills predicting a buyers market. It states that inter-bank rates, i.e. Libor rate, feed into variable rate mortgages. This will therefore have almost immediate effect, particularly on interest only variables. Given that banks must make profit, standard variable rates will have to be 7%+ on average, and if turmoil continues through the autumn and beyond, these rates will rise further. I've certainly seen some for 8% ish. People who can't re-mortgage onto a new fix will have to pay this or default.