Banks' Borrowing Rates Climb
By Jim O'Neill,  Newser User
Posted Nov 16, 2007 1:57 PM CST
Pedestrians pass a Citibank branch office Monday, Nov. 5, 2007, in Chicago.   (Associated Press)
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(Newser) – Financial institutions are paying more to borrow money than the average company for the first time in over a decade, reports Bloomberg, as investors fear the $50 billion in subprime losses the big banks have reported so far is just the tip of the iceberg. “We've only seen the estimates of the losses,'' said one analyst, adding that the credibility of banks and brokers is in question.

Yields on financial institution bonds were 1.49% higher than T-bills, matching 2002 record highs, as perceived risks increase. Corporate bonds yield an average 1.34% more than treasury bonds, reports Merrill Lynch. And the wave of subprime writedowns is still swelling, as Citigroup said recently it may add $11 billion to the $5.6 billion it’s already posted.