To be sure, the key lending rate affect trillions of dollars in loans began to finally track down the purpose of the Federal Reserve Fed Funds rate. On Tuesday, the Fed cut its federal funds rate to a range of 0.25% to 0%, even lower than the current Bank of Japan 0.30% target rate.
Despite plunge in LIBOR recently most banks continue to raise money, including those institutions that have recently received government capital through TARP, or Troubled assets for Assistance program. This suggests that even lower LIBOR rate is not encouraging lending.
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