AnonymousAlso

A Relief Rally, But Is Anyone Really Relieved?

I don't see why LIBOR has much to do with interbank lending. Just a few months ago we were told the numbers were being minipulated by the 16 banks that set it, only 3 US banks. US banks don't need to borrow via LIBOR as the Treasury is just about giving the money away to them.

My guess is LIBOR rates are more closely related to the disappearance of the non bank lending - investment banks, the drop in the size of the CP market or maybe money market mutual funds pull back from very short term corporates.