U.S. interbank lending rates are lower on Wednesday after the U.S. Treasury Department told the New York Times that it was drafting up plans to release the results of the stress tests of the 19 largest U.S banks.

According to the New York Times, citing a source, the Obama administration wants to make public the results of the government stress tests of financial institutions to limit rumour-mongering that could potentially scare off investors.

All 19 banks are expected to pass the stress tests, but some may be encouraged to raise additional capital, says the New York Times.

According to the British Bankers' Association on Wednesday, the overnight U.S. dollar Libor lost 0.50 bps to 0.26%, while the three-month Libor was down 0.94 bps to 1.11%.

The Ted Spread narrowed 1 bp to 95 bps and the Libor/OIS spread held steady at 93 bps. Both are key measures of credit tightness in the U.S.

Elsewhere, the overnight Canadian dollar Libor was down 2.83 bps to 0.43%, while the three-month Libor was unchanged 1.00%. The Euro Libor fell 0.38 bps to 0.80%, while the three-month Libor declined 1.00 bps to 1.41%. The Sterling Libor was flat at 0.60%, while the three-month Libor contracted 1.00 bps to 1.53%.

By Erik Kevin Franco
©CEP News Ltd. 2009