Foreign banks in US wary after funding costs rise

Following jump in Libor/OIS spread, many US entities continue borrowing from parents

wall-street-sign-and-US-flag
"It's very difficult to predict this market" - Danske's treasury head, Christoffer Møllenbach

Global banks are so far resisting the urge to change their funding strategies in response to US tax changes and widening Libor spreads, which have made it broadly more expensive to fund their US operations whether locally or by borrowing from abroad. 

A glut of Treasury bill supply in the first quarter caused the US dollar Libor/overnight index swap basis (Libor/OIS) – a proxy for bank funding costs – to reach levels not seen since 2009. At the same time, US tax reforms implemented on January 1

Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.

To access these options, along with all other subscription benefits, please contact [email protected] or view our subscription options here: http://subscriptions.risk.net/subscribe

You are currently unable to copy this content. Please contact [email protected] to find out more.

To continue reading...

You need to sign in to use this feature. If you don’t have a Risk.net account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an individual account here: