Interbank lending remains stable

Interbank confidence stood firm today after a tumultuous day on the world equity markets.

In the overnight markets, dollar Libor was the worst casualty, climbing 26 basis points to 0.7%. Sterling Libor stayed at 300bp and euro Libor dropped marginally to 2.89% from 2.9% yesterday.

Three-month dollar Libor increased by a basis point to 2.16%, while three-month sterling and euro Libor fell to 4.04% from 4.1% and to 4% from 4.06% respectively.

The Ted spread, which measures perceived counterparty risk by tracking the difference between three-month Libor and US Treasury bills, increased by a basis point to 2.12% as of 1710 GMT today.

The Chicago Board Options Exchange Vix volatility index, which measures the implied volatility of Standard & Poor's 500 index options, stood at 76.29 at 1710 GMT, having dropped from yesterday's close of 80.74.

European equity markets continued to suffer today. Both France's Cac 40 and Germany's Dax index recorded year lows for the second day running, closing at 2881.26 and 4127.41 respectively.

London's FTSE 100 index also plummeted to a year low at close of trading, falling 2.4% to 3780.96.

In the US, markets showed signs of recovery in early trading. As of 1745 GMT, the S&P 500 index had climbed 1.81% to 766.05.

In the Asian markets, Japan's Nikkei 225 closed today at 7910.79, a gain of 2.7%, while Hong Kong's Hang Seng index closed at 12659.20, an increase of 2.93%.

See also: US CDSs continue to soar as eurozone banks stabilise
Libor untouched by market turbulence