The European Inter-Bank lending (Euribor) 3 month reference rate is slowly but surely rising again. The 3 month margin above the base rate was over 0.9% late last year. After the liquidity the ECB injected over the Christmas/New Year period it fell back to 0.29%. However, it has been increasing steadily for the couple of weeks to 0.401% today. The crunch is back!
maybe another 500 billion will be pumped in to remedy the issue. where does the debacle end!
This is good news for bears and for prudent savers. We may see bank interest rates go up soon.
It almost certainly means that even if the ECB get around to making a 0.25% cut then it almost certainly will not be passed on except where it has to be with tracker rates.
Up again today to 0.429%.
3 month Euribor is 4.49% today, big move since yesterday.
Thats a big one day jump from 0.429 to 0.49. Cash from lenders is drying up again. Bank profitability is in for another hammering. At a 0.49 margin a lot of the LTV tracker mortgages are loss making again when you add in bank costs. Also, with business lending being based on the Euribor 3 month reference rate businesses have just in effect been landed with an unofficial interest rate hike!
On the rise again
3 month Euribor is 4.56% today, up 7 bps from Friday.
Still going up at 4.597%. A 0.6% margin on 3 month money.
Global main street bails out Wall street.*
4.652% 3 month money rate.
4.699%. A 0.7% margin on 3 month money. Pretty much all bank and building society LTV mortgages are lose making at these levels when costs are added. Not a bob is being made on anything with less than a 0.9-1% margin over the base rate. Also, business lending has now in effect been landed with two 0.25% rate hikes since the new year as the normal Euribor margin would be less than 0.2%.
Also, 3 month sterling libor is at 6%, having reached a low of 5.48% in January.
from Today’s FT
Still on the rise… up to 4.728% now. A new high for 2008 I believe
Hoping for some increases in savings rates soon
3 month money upto 4.805%. Still biting!
AIB are ending their tracker citing the euribor
3 month euribor fixing is 4.82% today.
Bumping one of the many Libor/Euribor threads. I couldn’t quickly find one of the ones with suspicions that the rates were being fixed; anyway, there are plenty of other threads out there about how the prime banks lied about the rates they were paying to artificially suppress the cost of money. And lo, another internet conspiracy theory proves true…
One thing to bear in mind is that for everyone paying libor, e.g. variable rate mortgage holders, there is someone else receiving it, e.g. a pension fund or an insurance company. This is not a costless crime.