Monday, October 13, 2008

TED Spread

The TED spread, the difference between the rate at which banks borrow from each other, LIBOR, and the rate on Treasury Bills is a key indicator for the problems in the interbank market. Perhaps as a result of the European moves towards a bank rescue plan the TED spread fell 1.4% today. But it is still very high. You can see from the chart below that the TED spread is still much higher than in the summer. But at least today is some positive news.

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