The world’s most widely used interest rate took its largest jump since the advent of the credit crisis in a sign that banks could be responding to concerns that the rate doesn’t reflect their actual borrowing costs, reports the WSJ. Thursday’s sudden jump in the dollar-denominated London interbank offered rate, or Libor, comes after a decision Wednesday by the British Bankers’ Association to speed up an inquiry into the daily borrowing rates that banks provide to establish the Libor rate. The FT reports that three-month dollar Libor hit 2.82% on Thursday, up from 2.74% on Wednesday, amid predictions it would rise above 2.9% on Friday.

This entry was posted by Gwen Robinson on Friday, April 18th, 2008 at 5:41 and is filed under Capital markets. Tagged with Libor. Edit this entry.