Those two options for bank borrowing make a big difference in their economic consequences.
Government support for recovery and reconstruction is expected, and guarantees for new bank borrowing will be a critical element in the support.
Nevertheless, it will have real consequences at the margin by shifting bank borrowing further away from the Fed and toward the market.
There has been no recent increase in bank borrowing from the Fed.
Short-term interest rates such as the overnight bank borrowing rate and one-month and one- year Treasury bill rates are already close to zero.
The toxic correlation of sovereign and bank borrowing rates implies that the rise in government financing costs will be felt in terms of higher bank lending rates.
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Just over a week after that statement, the Fed abruptly turned course, cutting the discount rate to encourage bank borrowing to ease a growing liquidity crisis in the credit and bond markets.
At Prime Minister's Questions, Mr Cameron said the manipulation of the key Libor inter-bank borrowing rate by Barclays traders was "outrageous" and those responsible for "spivvy and probably illegal activity" should be held to account.
Bank borrowing costs reached 6.88% on September 30th, more than three times the level of official American rates, while some were willing to pay a remarkable 11% to borrow dollars from the European Central Bank (ECB).
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As per Liam Halligan in the Sunday Telegraph: there is no such thing as a "risk-free rate" set by sovereigns anymore, and you get an unsustainable hike in the bank borrowing rate in Italy which sinks the aforementioned Italian banks and then the contagion spreads to France.
The gauge, a measure of bank-borrowing costs that is calculated daily in London, has steadily increased in recent weeks from a low of 0.245% in mid-June.
In the current money market conditions, where banks have to approach the central bank for borrowing, the overnight lending rate is in fact the key operational policy rate.
There was no borrowing from the central bank, only some small borrowing by the central budget from local budgets.
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These big projects left the city with no money in the bank, and borrowing expanded.
The consequences of even small changes in a bank's borrowing costs can be extreme.
Raynes' suit claims her father used her trust like a piggy bank, illegally borrowing millions to use as venture capital and shifting investment losses to the trust.
Still no problem: it can lend to Bank A, borrowing from the ECB, and take very poor collateral, by permission of the ECB, up to a certain limit.
What finally saved the city was anxiety about the fallout, in the form of possible bank insolvencies and borrowing costs for the rest of America, had it been unable to pay its debts.
Controls on bank lending meant borrowing was tough.
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The second question is a particularly resonant one - in that Mr Diamond has told the regulators that he neither instructed Barclays' managers to understate the bank's borrowing costs nor did he know this is what they were doing.
In the U.K. where regulatory pressure has already led to substantial deleveraging, bank lending has slumped, borrowing costs have risen, the economy has flat-lined and bank shares have crashed.
The European Central Bank will move in coming weeks to create a mechanism that could purchase bonds and lower borrowing costs, bank president Mario Draghi said this morning.
Banks can present any government bonds to the European Central Bank as collateral against borrowing.
On July 7, the central bank raised the overnight borrowing rate by six percentage points to 30%.
Small companies with bank lines are often borrowing at 3.5% to 4.5% interest.
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The fact that the central bank's overnight borrowing window has remained popular with jittery lenders has emphasized how reticent they are to lend to consumers and businesses (See "Banks Still Hoarding Cash").
The Italian government, which currently holds the EU's rotating presidency, is proposing that the Europe's long-term investment agency, the European Investment Bank, increase its borrowing so that it can pump an additional euro11 billion a year into roads, railways and other infrastructure projects across the continent, with private investors putting up several times as much money.
There is a danger that at some point a big commercial bank will run out of the collateral or assets needed for emergency borrowing from the European Central Bank or its relevant national central bank.
The bank should have netted the borrowing against another account that was in credit.
There will be many who view any such forgiveness by the Bank of England of government borrowing as anathema.
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