Bank credit risk has risen in Europe and the 3-month Euribor rate, a key inter-bank lending rate, has risen to the highest level since December 2000.
JPMorgan Chase & Co says that credit-default swaps on the iTraxx Financial Index of subordinated debt, a measure the cost of protecting the bonds of 25 European banks and insurers against default, rose 4 basis points to 48 basis points. The rise in the index comes as hopes of an early end to the credit crisis has abated..
The Financial Times reported today that Northern Rock Plc has borrowed £8 billion pounds from the Bank of England - equivalent to a third of its deposits prior to its recent financial crisis. It's also reported that Canadian lenders are also encountering ng difficulties refinancing in the money markets, Bank of Montreal Chief Financial Officer Karen Maidment said on Thursday.
The Libor, London interbank offered rate that banks charge each other for three-month loans in euros is at 4.79 percent, 79 basis points more than the European Central Bank's benchmark rate and the highest since May 2001, according to the British Bankers' Association.
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