The rate banks pay for three-month loans in dollars rose to the highest in almost nine months as Europe’s near-$1 trillion support plan in the wake of Greece’s budget crisis failed to encourage banks to step up lending.
Spanish bonds outperformed their German equivalents with the extra yield on Spain’s 10-year securities shrinking toward the lowest since April 2011 after the nation sold a record amount of debt through banks.
In May 1931, a Viennese bank named Credit-Anstalt failed. Founded by the famous Rothschild banking family in 1855, Credit-Anstalt was one of the most important financial institutions of the Austro-Hungarian Empire, and its failure came as a shock because it was considered impregnable.
Mario Draghi said the European Central Bank is “ready to act” as rising money-market rates threaten his drive to reassure investors that borrowing costs will stay low. Bond yields extended their gains.