Tuesday May 6, 12:08 PM
UK interbank lending rates edge lower on most maturities
LONDON (Thomson Financial) - The rates at which banks lend to each other in the United Kingdom were a touch lower across most maturities, suggesting credit conditions are improving, but only gradually.
The key three-month Libor rate
edged down slightly to 5.81 percent from 5.82 percent the previous trading day.
The one-month rate fell to 5.45 percent from 5.46 percent, while the overnight contract, generally the most closely aligned to the BoE's 5.00 percent benchmark rate, remained unchanged at 5.10 percent.
The Bank (NASDAQ: TBHS - news) of England last month announced a plan whereby it would swap mortgage-based assets for government bonds in an effort to improve stability and confidence in the banking system.
The success of the plan is linked to the three-month Libor rate, which in part determines the cost of the swap agreements for banks.
Analysts have warned the improvements to liquidity may be slow to emerge because the swaps are still relatively expensive for banks.
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