The Residential Real Estate Crash Index Message Board

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Strategies & Market Trends : The Residential Real Estate Crash Index

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From: Les H	9/5/2007 3:57:43 PM
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Money Market Squeeze Is Getting Worse, Barclays's Bond Says By Patricia Kuo Sept. 5 (Bloomberg) -- The shortage of funds in global money markets has worsened since the Federal Reserve and the European Central Bank tried to ease a squeeze on interbank lending, according to Barclays Capital. Central banks worldwide added more than $350 billion to the financial system since Aug. 9 to avert a crisis of confidence fueled by concern that U.S. subprime-mortgage losses will curtail lending. The three-month dollar London interbank offered rate that banks charge each other to borrow rose today to 5.72 percent, the highest in seven years. ``This suggests that the money market liquidity crisis is getting worse, not better,'' said Tim Bond, the London-based head of global asset allocation at Barclays Plc's securities unit. Barclays, the U.K.'s third-biggest bank, tapped the Bank of England's emergency overnight funds twice last month at the central bank's penalty rate of 6.75 percent, 1 percentage point higher than its benchmark rate. The Bank of England today offered to provide additional cash to reduce ``unusually high'' overnight interest rates and said it shouldn't be expected to take action to reduce three- month borrowing costs. The European Central Bank said money market volatility has increased and it may act tomorrow to ``contribute to orderly conditions.'' bloomberg.com Liquidity not getting where it's needed?

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