Inter-bank lending is drying up and some investors are withdrawing funds particularly from southern European banks.
We have yet to see prosecutions for manipulation of the Libor inter-bank lending rates.
On Tuesday, the three-month inter-bank lending rate declined to 4.63% from 4.83% late last week.
He also said no government minister had asked him to "lean on" Barclays over its inter-bank lending rates.
It recently launched a criminal investigation, in the wake of the Libor scandal, into the rigging of inter-bank lending rates.
This view came despite the Bank of England's efforts in April to free up inter-bank lending through its special liquidity scheme.
Mr Wheatley is also conducting a review of Libor, the inter-bank lending rate that has been discredited following manipulation by traders.
Banks would start questioning each other and inter-bank lending would seize up.
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The shadow home secretary said it was a scandal no-one has been arrested for the "multi-billion pound" Libor inter-bank lending rate fraud.
Intially, seven banks, including HSBC and Royal Bank of Scotland, were questioned in the U.S. for alleged manipulation of the Libor inter-bank lending rate.
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Barclays chief executive Bob Diamond has resigned a week after the bank was fined a record amount for trying to manipulate inter-bank lending rates.
David Cameron has, so far, only called for accountability at Barclays to go the very top and for a narrow inquiry into the management of LIBOR - the inter-bank lending rate.
There has been a furore over the fixing of the London inter-bank lending rate, known as Libor, which is considered to be one of the most crucial interest rates in finance.
Mr Miliband says he wants to make it easier to prosecute bankers who misbehave -- such as the employees at Barclays, who colluded with others in fixing the inter-bank lending rates, or Libor.
The package - which also includes guarantees of inter-bank lending - is designed to restore financial stability and to encourage the resumption of more lending to business and to people who want mortgages.
Posted 6.59am: The BBC has seen documents which show that ministers in the last Labour government held discussions with banks about policies which would allow the Libor rate - the inter-bank lending rate - to fall.
We have to start by remembering that there were good reasons for the Bank of England and the government to worry about a high LIBOR rate at the time since it was a symptom of the credit crunch - ie the disappearance of inter-bank lending.
Which senior Whitehall figure told the Bank of England to tell Barclays that they should get their LIBOR - or inter bank lending interest rate - down?
That something was 34 billion Chilean pesos in rehabilitation funds from the Chilean government and a Latin American lending institution called the Inter-American Development Bank.
We will work with you to ensure that the Inter-American Development Bank can take the necessary steps to increase its current levels of lending and to carefully study the needs for recapitalization in the future.
Mr Coogan warned that the bank's efforts had yet to have much effect on the London Inter-Bank Offered Rate (Libor), the main interest rate governing the cost of lending between banks.
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