3-mth dlr, euro, stg Libor rates reach new lows

inspector_monkfish

michaels wrote: »

Thanks for this, Feb 08 when they approved my mortgage would also be interesting.

on 1st Feb 2008 LIBORs as follows:

1mth 5.54
3mth 5.56
6mth 5.51
9mth 5.43
12mth 5.34

not much of a curve going on back then!

michaels

So why can't they borrow from the money markets (subject to capital cushions) to fund mortgages - obviously borrowing at a maturity to match the maturity of the mortgage deal?

inspector_monkfish

michaels wrote: »

So why can't they borrow from the money markets (subject to capital cushions) to fund mortgages - obviously borrowing at a maturity to match the maturity of the mortgage deal?

they wouldn't match fund every single mortgage on their books
for a start the amounts would just be too tiny!

michaels

But in general could they not use money market funds to fund their variable rate mortgages rather than current/saving account deposits?

inspector_monkfish wrote: »

they wouldn't match fund every single mortgage on their books
for a start the amounts would just be too tiny!

inspector_monkfish

michaels wrote: »

But in general could they not use money market funds to fund their variable rate mortgages rather than current/saving account deposits?

yes they could i suppose, but it would be far too time consuming and fiddly - plus there is not much money being lent in these periods between banks at the moment

Thrugelmir

michaels wrote: »

But in general could they not use money market funds to fund their variable rate mortgages rather than current/saving account deposits?

Remember cash is flowing around the system daily. As you pay your gas bill that "cash" is moving from one bank to another for example.