The spread expresses the expected future three-month premium based on London interbank offered rates (Libor) over anticipated central bank rates, or Overnight Index Swap (OIS) rates — a key measure of financial market stress. Before the current crisis it was 15 and now its 300.

The so-called Libor-Overnight Indexed Swap, or Libor-OIS, spread is up from about 24 basis points in January and 11 basis points in the 10 years prior to August 2007, before the start of the credit squeeze.

It was 82 basis points on Sept. 15, the day Lehman Brothers Holdings Inc. filed for bankruptcy and 11 basis points on July 31, 2007, just before the start of the credit squeeze.

With the ongoing credit crunch in the US and Europe, can we be sure that India is not going to be afflicted with this disease soon? (more…)

The 4 credit rating agencies recognized by SBI being Crisil, Fitch Ratings, ICRA and CARE. Should the government introduce a mechanism to prevent companies from shopping for credit rating agencies. Some of the causes for the subprime credit crisis in the US can be attributed to the ratings agencies rating Junk Bonds as AAA rated bonds. I think its worth considering by the Indian government some kind of legislation on this matter to safeguard the investor community.

What do you think..discuss

Jai Hind