Business | Banking

Libor diverges most since 2009 as Europe struggles

Growing differences signal the bloc's financial system remains fragile

  • Bloomberg
  • Published: 00:00 October 14, 2011
  • Gulf News

London: Rates at which the world's banks say they can borrow from each other in dollars are diverging by the most in more than two years, a sign European leaders are still struggling to contain the region's debt crisis.

The gap between the highest and lowest reported fixings by 19 banks contributing to the three-month London interbank offered rate reached 18.5 basis points yesterday, the widest since September 2009. Libor, the lending benchmark for $360 trillion of financial instruments, climbed to the highest since August 2010.

The growing differences signal the financial system remains fragile as European leaders rally support for a bigger bailout package for the region's most indebted nations.

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