1 reply to this topic

[norman]

This is quite amusing.

Large banks, principally the Europeans don''t want to lend to each other pushing up LIBOR.

Most of them have a huge amount of perpetual FRN''s(floating rate notes) out there & the interes rate is paid quarterly @ a given number of basis points over LIBOR.

These are mainly Eurobonds which are costing them dearly.
US banks are less affected as they tend to issue variable rate notes tied to T-bill rates which are much lower.

The US banking system appears to be in shambles because it is more transparent.

This is one example of the disasters facing the European banks.

[Thomas]

is, IMO, because the banks do not trust the Feds to act fairly and non-capriciously.  Would you loan to a bank not knowing whether it will be protected or taken behind the barn and shot?  That''s a rhetorical question: Of course nobody would.  These D-bags are destabilizing the system by acting erratically.