TED spread: Difference between revisions
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imported>Doug Williamson (Create page. Sources: BIS Quarterly Review, March 2019, Investopedia webpage https://www.investopedia.com/terms/t/tedspread.asp) |
imported>Doug Williamson (Update for LIBOR transition.) |
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TED spread is the difference (spread) in interest rates between: | TED spread is the difference (spread) in interest rates between: | ||
*US government 3-month borrowing rates, considered effectively risk-free; and | *US government 3-month borrowing rates, considered effectively risk-free; and | ||
*3-month interbank interest rates | *3-month interbank interest rates. | ||
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* [[Credit risk]] | * [[Credit risk]] | ||
* [[Eurodollars]] | * [[Eurodollars]] | ||
* [[Secondary spread]] | * [[Secondary spread]] | ||
* [[Spread]] | * [[Spread]] | ||
Latest revision as of 08:53, 26 April 2022
Credit risk.
TED is an acronym for Treasury EuroDollar rate.
TED spread is the difference (spread) in interest rates between:
- US government 3-month borrowing rates, considered effectively risk-free; and
- 3-month interbank interest rates.
The greater the TED spread, the greater the measure of credit risk on the banks in the interbank market.
