Euribor surges amid funding crisis fears
Share
Euribor rates - the rates at which European banks lend to each other - surged to a nine-month high amid fears of a funding crisis when the European Central Bank withdraws its £356bn support package.
Concerns about funding grew as the ECB decided not to renew one-year loans to financial institutions.
According to the FT, the ECB will today offer unlimited loans for three months in an effort to ease pressure on the banks that must pay £356bn between them in one-year loans tomorrow.
According to a report in the Daily Mail, three-month Euribor rates jumped from 0.754 per cent to 0.761 per cent, with further rises possible depending on how much money banks borrow from the ECB in today’s three-month loan programme.
Spanish lenders have warned of the dangers of withdrawing the support given the debt crisis in the euro-zone.
UK lenders with branches on the continent are also affected by the move.
If you enjoyed this article, sign up here to receive daily email updates from Money Marketing and Follow @_moneymarketing
