Breaking News

Sulzer Confirms Merger Talks With Dresser-Rand

Banks’ Dollar Funding Costs Decline to 15-Month Low in Europe

The cost for European banks to borrow in dollars dropped to the lowest level in 15 months, according to a money-markets indicator.

The three-month cross-currency basis swap, the rate banks pay to convert euro interest payments into dollars, was 18.5 basis points below the euro interbank offered rate at 8:15 a.m. in London from minus 22 yesterday, according to data compiled by Bloomberg. The swap is the cheapest since June 14, 2011.

The one-year basis swap was 25 basis points below Euribor from minus 26 yesterday. A basis point is 0.01 percentage point.

A measure of European banks’ reluctance to make unsecured loans to one another held at the lowest since June 2011. The difference between Euribor and overnight index swaps, the Euribor-OIS spread, is little changed at 17 basis points.

The European Banking Federation’s euro overnight index average, or Eonia, of unsecured lending deals was set at 0.101 percent yesterday from 0.100 percent the day before. The Eonia swap, an estimate of average overnight borrowing costs over the next three months, was little changed at 8.5 basis points.

Lenders cut overnight deposits at the European Central Bank yesterday, placing 315 billion euros ($407 billion) with the Frankfurt-based central bank from 330 billion euros the day before.

To contact the reporter on this story: Katie Linsell in London at

To contact the editor responsible for this story: Paul Armstrong at

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.