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Libor soars to high as banks run scared
30.09.08
The cost of borrowing dollars on the global money markets rocketed today as banks reeling from the financial crisis refused to lend to each other.
The overnight lending rate between banks, known as Libor, jumped a staggering 4.31 percentage points from 2.57% to 6.88%, the biggest increase on record to an all-time high.
Borrowing pounds overnight also surged, with sterling Libor up from 3.71% to 6.78%.
It came despite central banks pumping billions of dollars into the banking system to prevent it seizing up further following last night's rejection of the $700 billion bank bailout plan in the US.
