Submitted by Businomics Blog

I recently posted a comment to the effect that banking markets have calmed, as evidenced by the return to normal spreads between LIBOR and the Fed Funds rate.  Now the Wall Street Journal has a story (subscription required) suggesting that LIBOR may not be accurately reported these days, as banks decline to admit how high an interest rate they are paying in bank-to-bank transactions.  If this is the case, then there’s more nervousness than I had thought.  We don’t have the full story at this point (and maybe never will).

Visit 1800blogger to see all of our industry leading blogs.