Witzy

LIBOR Shows Worst Is Yet to Come for Credit Markets

This article presents standard economic theory. However, be cautious with the LIBOR here, since banks are hesitant to trade with each other because of a lack of information or transparency, this is not just about liquidity. LIBOR will remain high so long as banks do not know who they can trust, and that won't change until they know precisely what collateralized debt they have on their own books.