Worries about credit problems in UK banking have risen after the rate at which banks lend to each other hit its highest level since December 1998.
On Tuesday the rate, - known as the London Interbank Offered Rate or Libor - reached 6.7975% for a loan over a three-month period.
It suggests that banks are reluctant to lend money to each other.(Source:BBC News)
Growth, meanwhile, has halved in the 13-nation eurozone between March and June 2007, following weaker investment. The area's economy grew 2.5% on an annual basis, or 0.3% from to the previous quarter, official data showed.
Bottom line. Global central banks will have to lower interest rates. The global economy cannot function without a sound banking system.
This is, of course, good news for the financial markets. Unless the central bankers fall asleep at the wheel.
More on http://www.peterdag.com/.
George Dagnino, PhD
Editor, The Peter Dag Portfolio
Since 1977
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