Libor Rate hits a WALL.

Libor slide hits a wall
Bad news from bank sector keeps rates, spreads aloft

Investopedia explains London Interbank Offered Rate - LIBOR
The LIBOR is the world's most widely used benchmark for short-term interest rates. It's important because it is the rate at which the world's most preferred borrowers are able to borrow money. It is also the rate upon which rates for less preferred borrowers are based. For example, a multinational corporation with a very good credit rating may be able to borrow money for one year at LIBOR plus four or five points.

Countries that rely on the LIBOR for a reference rate include the United States, Canada, Switzerland and the U.K.
SAN FRANCISCO (MarketWatch) -- The sharp improvement in Libor rates since late last year has stalled as anxiety about banks' health has crept back into this key lending market.
The London interbank offered rate, or Libor, rose to 1.235% Wednesday from 1.09% on Jan. 13. Over the same period, the spread between Libor and rates on overnight index swaps, another indicator of banks' ability to access funds, has stuck to about 0.99 of a point. That's far higher than it was before the start of the credit crunch.
Higher rates and wider spreads mean banks are more hesitant to lend to each other, keeping pressure on their funding costs, and indirectly, the rates they charge homeowners and corporate lenders. Libor's behavior also suggests the Federal Reserve and other central banks have more work to do as they try to rekindle consumer borrowing by lowering rates.
"It's not really going down as fast as it should -- it's kind of hitting a limit," said Juan Valencia, credit strategist for Societe Generale in London, of Libor.
He called the recent trend "disappointing."
"It's one of the key things we need to see before we can see a flow of credit to consumers and banks to fund themselves at normal levels again," he said.
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