Things are still tetchy in the London inter-bank market as evidenced by current rates, with lenders demanding higher rates because of concerns about “skeletons in cupboards”. For firms dependent on short term credit to finance their business, this is getting more painful.
Three-month sterling Libor rates at new 8-1/2 yr high
Mon, 03 Sep 2007, 11:55
The London interbank offered rate for three-month sterling deposits hit a fresh 8-1/2 year high, while euro rates for the same period set a 6-year peak on Monday, buoyed by strong cash demand from financial institutions. The three-month sterling Libor fixing rate rose to 6.7400 percent, its highest level since December 1998 in the aftermath of the financial market crisis following the collapse of the hedge fund Long Term Capital Management.