Inter-bank lending has revived; Bernanke fears relapse

A crucial measure of inter-bank lending — Libor has fallen from 4.82% in September 2008 to below 1% now. That’s considered a better interest rate spread for that index.

Central Bank chief Bernanke remarked “‘A relapse in financial conditions would be a significant drag on economic activity and could cause the incipient recovery to stall.'”(1)

There are still trillions in assets that could go under water.



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