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Thursday, September 27, 2007

Euro Libor Rates

Basically, following up on this post earlier this month I wish to report that the 3 month euro libor rate is still stuck where it was, way above the ECB refi minimum bid rate. Here is a chart with the latest data we have from the BBA:

Also the FT reports this morning that the European Central Bank’s emergency lending fund, which attracts a penal interest rate, was tapped yesterday for €3.9bn – the largest sum asked for since October 2004.

The surge in demand for the ECB’s “marginal lending facility” pointed to the difficulties still being faced by European banks as a result of the global credit squeeze. The ECB revealed no details but it is likely that more than one borrower was involved. Use of the marginal lending facility attracts a 5 per cent interest rate – significantly higher than market rates.

Oh, Jean Claude, Jean Claude, wherefore art thou, my beloved?

Incidentally, the BBA link to the libor data is here.

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