This shift has been endorsed by the markets

The policy change announced Wednesday by Henry Paulson has caused some turmoil on the currency market. The Secretary of State for the Treasury indicated that the plan to rescue designed in September will not be used eventually for the purchase of toxic assets held by financial institutions. The fixing of a price proves to be too complex exercise. Paulson finally agreed to the solution of recapitalisation, already preferred in Europe.

This shift has been endorsed by the markets. After the stock market, the interbank rate in dollars have accused the coup. Libor 3 months, which had experienced a continuous decline since October 10 (decrease in total 270 points) rebounded yesterday. He moved from 2,132 to 2,148. A sign that the Bank refinancing of short-term market is still under infusion. Since the beginning of the crisis, the authorities have not spared their sentence that banks resume lending between them, to revive the dissemination of credit throughout the economy. The US Federal Reserve was massively injected liquidity and lowered its main interest rate to 1 on 29 October. The difference between the interbank rate and the rate anticipated the fed, which serves as a barometer of tensions, it is therefore significantly reduced. It is currently about 160 points, more than 360 at the height of the crisis.

"Sage flip-flops."

"The market probably was a movement of mood, but on the merits, the about-face by the American authorities is rather wise", analysis René Defossez, at Natixis. "The recapitalisation of banks in the United Kingdom helped to bring down the price charged to protect against the risk of failure associated with these institutions," says strategist, referring to the CDS (credit default swaps").

After this judgment, the relaxation of the Libor in dollars could continue, in the image of the trend followed by European interbank rates. Expectations of new actions of monetary easing on both sides of the Atlantic should still play an important role in this regard. "We believe that the Fed will reduce its interest rate to 0.5 at its December meeting, or a lower history", says Morgan Stanley team.

In United Kingdom, 150 money rent basis points decrease November 6 a magnitude unexpected caused a very net movement of relaxation on the Libor in pounds sterling. It has also continued to back since October 10. He moved to 6,285-4,202 yesterday. Many strategists believe that the Bank of England could align with the level of interest rates from the Fed.

The generous ECB

The measures of the European Central Bank (ECB) also bear fruit. Euribor 3 months relaxes since about five weeks. Yesterday, it was set at 4,245. Market participants speculate there also a new monetary easing. "The ECB reduce certainly still interest rates by 50 basis points, the meeting of December 4, 2.75 ", predicted ING. The Institute of emission, which lowered its rates last week, also decided to reduce all the cost of borrowing for banks for long-term refinancing operations (3-6 months). The ECB is more generous than expected, since it had warned financial institutions might apply a higher rate than for those refinancing operations. The decrease in the amounts put on deposit at the day the day from the Central Bank also reflects the improvement of the situation. Fear of a shortage of liquidity and the reluctance to lend its funds had led credit institutions to store an enormous amount. Almost $ 300 billion EUR were thus filed a week ago. The enlargement of the range of assets accepted as collateral by the ECB should also relieve a little banks today, date of entry into force of the measure.