alabala Posted December 13, 2007 Share Posted December 13, 2007 http://www.bloomberg.com/apps/news?pid=206...&refer=home Libor Fails to Drop From 7-Year High; Crunch Persists The highest short-term rates since December 2000 suggest that the first coordinated central bank action since the Sept. 11, 2001, terrorist attacks may not be enough to revive interbank lending. The cost of borrowing dollars fell 7 basis points to 4.99 percent, about half what was anticipated, based on prices of Libor futures contracts. ``It's not going to help us find an exit to this crisis,'' said Cyril Beuzit, head of interest-rate strategy at BNP Paribas SA in London. ``These measures aren't going to address the root cause of the crisis. Banks are still reluctant to lend money to each other because there are serious concerns about potential further bad news.'' Brown, Geithner U.K. Prime Minister Gordon Brown said the surge in credit costs should spur increased transparency in the banking industry and change the way credit-rating companies work. ``It's a wake-up call for the global economy,'' Brown told lawmakers in Parliament in London today. ``The existing institutions aren't good enough.'' Fed Bank of New York President Timothy Geithner said today central bankers are looking at ``additional instruments'' to provide funds to banks in times of stress. ``The market is underestimating the significance of the move by the central banks,'' said Ciaran O'Hagan, head of interest-rate research in Paris at Societe Generale SA. ``It's a strong action that will tide us safely over year-end and hopefully restore confidence to the money markets early in the new year.'' Turmoil in the credit markets has caused losses for everyone from shareholders of New York-based Citigroup Inc., the largest U.S. bank, to Florida schools and towns invested in a state-run fund that owned downgraded and defaulted securities issued by SIVs. Citigroup, which said its mortgage-related writedowns may reach $11 billion this quarter, has fallen 39 percent since June on the New York Stock Exchange. Quote Link to comment Share on other sites More sharing options...
Ah-so Posted December 13, 2007 Share Posted December 13, 2007 3-month sterling dropped to 6.51%, a full percentage above base rate. Wow. Quote Link to comment Share on other sites More sharing options...
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