Money markets still not ready to nurture economy

Massive cash injections by central banks have relieved the worst of the symptoms, while reductions in official interest rates to record lows have slashed actual bank-to-bank lending rates.

But banks are still charging each other an unhealthily wide premium over a near risk-free benchmark rate that is linked to market expectations of central bank interest rates.

This may not be surprising given banks are still laden with dubious debt accumulated over years when credit and housing market bubbles inflated each other.

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