U.S. interbank lending rates are once again mixed on Wednesday ahead of a major announcement next week from the Treasury Department that will detail the future of the financial rescue package for Wall Street.
In a bid to repair a negative public image of the controversial $700 billion Troubled Asset Relief Program (TARP), the U.S. government is reworking the program to include a $500k salary cap for CEOs of firms accessing the program.
Earlier this week, new agencies also reported that U.S. Treasury Secretary Timothy Geithner's announcement on Monday could include plans to set up a "bad bank" to buy toxic assets from financial institutions. Meanwhile, the Wall Street Journal reported on Tuesday that the announcement will include foreclosure prevention support and perhaps the creation of a non-Treasury entity to manage the TARP.
According to the British Bankers' Association on Wednesday, the overnight U.S. dollar Libor was 1 basis point higher at 0.32% while the three-month Libor held steady at 1.24%.
The Ted-Spread widened 1 basis point to 93 bps and the Libor/OIS spread narrowed 1 bp to 98 bps. Both are key measures of credit tightness in the United States.
Elsewhere, the Canadian dollar Libor was flat at 1.00%, while the three-month Libor was down 4.67 bps to 1.60%. The Euro Libor declined 0.75 bps to 1.12%, while the three-month Libor fell 1.00 bps to 2.05%. The Sterling Libor was down 0.63 bps to 1.59%, while the three-month Libor pulled back 0.25 bps to 2.16%.
By Erik Kevin Franco and edited by Stephen Huebl
©CEP News Ltd. 2009