#finance #ted-spread
The TED spread is an indicator of perceived
credit risk in the general economy,
[2] since T-bills are considered risk-free while LIBOR reflects the credit risk of lending to commercial banks
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TED spread - Wikipedia, the free encyclopediaf financial crisis. A rising TED spread often presages a downturn in the U.S. stock market, as it indicates that liquidity is being withdrawn.
Contents
1 Indicator2 Historical levels3 See also4 References5 External links
Indicator[edit]
<span>The TED spread is an indicator of perceived credit risk in the general economy,[2] since T-bills are considered risk-free while LIBOR reflects the credit risk of lending to commercial banks. An increase in the TED spread is a sign that lenders believe the risk of default on interbank loans (also known as counterparty risk) is increasing. Interbank lenders, therefore, deman Summary
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