The latest wave of the seven-month old global credit crisis intensified today as interbank lending rates climbed again in Europe and Asia.
The US Federal Reserve's decision on Friday to pump an additional $200 billion into the US banking system helped ease the stress in dollar borrowing, but bank-to-bank lending rates in euros climbed to their highest in almost two months.
The rise in euro rates - the third such rise since last August and a reflection of banks hoarding cash and being unwilling to lend to each other - has seen three-month London Interbank Offered Rates jump almost a fifth of a percentage point so far this month.
European Central Bank chief Jean-Claude Trichet, speaking as chairman of the Global Economy Meeting of the world's top central bankers, said significant market disruption and volatility were persisting.
Signs that strapped banks are cutting back loans everywhere has sent fresh shock waves through debt markets around the globe this month, as their growing unwillingness to use scarce capital to broker markets has prompted seizures everywhere from US municipal bonds to euro zone government debt.