The Determinants of Bank Loan Pricing

Figure 1 shows the movements of Prime, Libor and CD rates over 1974-1995, and Figure 2 shows the differences between these rates in the same time frame. The relationships among rates were somewhat disordered in the first half of the period shown, but in recent years clear patterns have emerged. The premium of Libor over domestic CD rates has settled down to about 1/8 of 1%, so that the two ... ................
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