Nov. 21 (Bloomberg) -- European banks’ reluctance to make unsecured loans to one another rose to the highest in two weeks, according to a money-market indicator.
The difference between the euro interbank offered rate and overnight indexed swaps, known as the Euribor-OIS spread, was 12.5 basis points at 8:30 a.m. in London from 11.5 yesterday, data compiled by Bloomberg show. The measure is the highest since Nov. 7.
The cost for European banks to borrow in dollars was little changed with the three-month cross-currency basis swap at 28 basis points below Euribor, or 0.28 percentage point. The one-year basis swap was 29.5 basis points below Euribor from minus 29 yesterday.
The European Banking Federation’s euro overnight index average, or Eonia, of unsecured lending deals was set at 0.074 percent yesterday from 0.077 percent the day before. The Eonia swap, an estimate of average overnight borrowing costs over the next three months, was 6.5 basis points from 6.8 yesterday.
Lenders cut overnight deposits at the European Central Bank yesterday to 230 billion euros ($293 billion) from 240 billion euros the day before.
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