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Confidence has drained from the interbank markets.
That was precisely what caused the interbank markets to freeze in 2008.
Even after the seizure in interbank markets in August 2007, macroeconomists misread the danger.
Because banks lack the liquidity to cover these positions, they must raise it in interbank markets.
After all, the interbank markets lie deep within the financial economy the closest thing to central-bank money itself.
But concerns about banks' exposure to such risky debt have led to strain in the European interbank markets.
Similar(24)
At the time, the interbank market functioned relatively well.
The European interbank market is still tighter; Euribor is at an all time high.
It is possible that those arrests are unrelated to last week's interbank market stress.
Those will be doled out to lenders in the interbank market.
In the autumn a default by a middle-sized stockbroker, Sanyo Securities, paralysed the interbank market.
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