Spreads between dollar interbank costs and other risk-free measures widened in Asia on Tuesday as sliding equity markets and anxiety over government funding for U.S. banks spawned a fresh bout of credit risk.
The widening of spreads on Tuesday was spurred in part by news of a jump in bad loans at Bank of America (BAC.N).
But spreads have been creeping higher since last week against a backdrop of a reversal in the steep stock market rally, worries over banks' solvency and concerns over the outcome of the stress tests the U.S. government is conducting on its banks. read more
The widening of spreads on Tuesday was spurred in part by news of a jump in bad loans at Bank of America (BAC.N).
But spreads have been creeping higher since last week against a backdrop of a reversal in the steep stock market rally, worries over banks' solvency and concerns over the outcome of the stress tests the U.S. government is conducting on its banks. read more
