We have yet to see prosecutions for manipulation of the Libor inter-bank lending rates.
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.
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.
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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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.
Mario Draghi has already expressed concern over tight credit markets and bank lending rates, and after already having cut rates in his first meeting, markets expect at least a 25bps cut with 70% probability.
Economists at National Bank of Greece, an Athens lender, predict that, if Greece returns to the drachma, incomes will fall by at least 55%, bank lending rates would reach 37%, output would plunge by 22% and property values would fall by half.
Also, the inflation rate is hovering at around 33% while bank-lending rates are at about 40% in the southern African country.
However, food inflation has been hovering close to double digits for over two years, driving up overall inflation and crimping the space the central bank has to cut lending rates to stimulate economic growth.
The People's Bank of China has cut interest rates three times and strict controls on bank lending have been scrapped.
China still has many cards to play, including lowering interest rates, increasing bank lending and infrastructure spending and stimulating housing demand.
" Lending Interest Rates and Bank Spreads", Banco Central do Brasil, 2005.
The Bank for International Settlements (BIS) argued in its recent annual report that huge growth in bank reserves was driving overnight-lending rates to zero, causing the market for unsecured overnight lending to atrophy.
Beijing has to drop deposit rates when it cuts lending rates to maintain bank margins, and that is in fact what the central bank did on Thursday, reducing the benchmark one-year rate for deposits by 25 basis points.
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They have allowed the money supply to grow by half since January 2009, real interest rates to plunge and bank lending to breach government quotas.
Last week the central bank also scrapped the ceiling on banks' lending rates, allowing them to charge more to riskier borrowers.
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To be specific, the Fed is on record saying that the purpose of quantitative easing is to lower interest rates and spur a rebound in bank lending, which is primarily intended to boost housing prices.
With a Reserve Bank of India policy rate of 6%, and lending rates around 8.5%, credit is extremely cheap.
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The Bundesbank believes that minimum reserve requirements give a central bank tighter control over bank lending and help to smooth out money-market interest rates.
Based on the size of external and budget deficits, inflation rates and the pace of growth in bank lending, India, Turkey and Hungary were deemed to be most vulnerable.
Simultaneously, the ceiling on bank deposit rates was raised to 1.1x from 1.0x the benchmark rate, and the floor for lending rates was lowered to 0.8x from 0.9x.
The European Central Bank is lending the banks as much as they want at low rates.
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Although providing relief to companies, slashing lending rates without cutting deposit rates would further dent bank profitability.
Ex-Barclays CEO Robert Diamond quit in July after revelations that the bank had been involved in an international scheme to manipulate interbank lending rates.
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Reprivatisation of bank lending should proceed naturally as commercial banks offer positive nominal interest rates and bid funds away from the postal saving system.
Competition between banks will tend to bring the lending and borrowing rates closer together, theoretically squeezing bank profits to zero in the ideal case of a perfectly competitive market.
We left this story last month with the happy expectation that Fed Chairman Bernanke was going to be deflating the carry trade bond bubble, bring long term interest rates in line with inflation expectations, stimulate bank lending and thereby create economic growth.
Indeed, as the Sam's Club example amply proves, if market rates of interest rise to usurious levels and bank lending becomes scarce, this serves as a market signal for businesses outside the traditional banking system that their entrance into finance will be rewarded.
He added that he backs the Reserve Bank of India's focus on reducing inflation, rather than lowering key lending rates to spur growth.
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