Analyse fondamentale : Money-Market Rates May Rise on Threat o

M3057385

17 avr. 2008 •19:34

Money-Market Rates May Rise on Threat of Libor Ban (Update1)

By Agnes Lovasz

April 17 (Bloomberg) -- Money-market rates may rise after the British Bankers' Association threatened to ban members that deliberately understate their borrowing costs.

Participants have complained that banks may be submitting inaccurate information amid the global credit squeeze, Angela Knight, chief executive officer of the London-based association, said yesterday. The BBA will exclude banks that give misleading quotes and plans to speed up a review of the daily ``fixing'' process by which borrowing costs are determined, it said.

The threat ``will add to the upward drift we're already seeing'' in money-market rates, said Christoph Rieger, a fixed- income strategist in Frankfurt at Dresdner Kleinwort, the investment bank owned by the insurer Allianz SE.

The BBA asks 16 member banks including HSBC Holdings Plc and Royal Bank of Scotland Group Plc every day to say how much it would cost to borrow from each other for 15 different periods in currencies including dollars, euros and pounds. It then calculates averages, known as the London interbank offered rates, or Libor, published after 11:30 a.m. local time.

The European Banking Federation also publishes rates for the euro, or Euribor, gleaned from 44 member banks 90 minutes earlier. The cost of borrowing in euros for three months rose 1 basis point to 4.78 percent today, its fifth consecutive increase and the highest level since Dec. 20, the EBF said. The rate has increased 42 basis points in the past two months.

The global credit squeeze has raised concern lenders have been manipulating the Libor fixing process to prevent their borrowing costs from escalating, the Bank for International Settlements said in March. Money-market rates began surging last year as the fallout from the U.S. housing slump left banks wary of lending to all but the safest borrowers.

``I don't think Libor is dead,'' Jon Eilbeck, chief operating officer of global rates at Deutsche Bank AG, said in a speech at the International Swaps and Derivatives Association annual conference in Vienna today. ``Current stress has attracted more new entrants'' to markets that rely on the system, he said.