The Tell: Why you shouldn’t freak out about rising money-market rates

Rising short-term market interest rates aren’t a rerun of 2008.

Instead, the recent run-up, which has seen three-month dollar Libor and commercial paper rates rise by more than 20 basis points since early July, appears to be in anticipation of money-market rule changes that is starting to have some ripple effects, wrote Paul Ashworth, economist at Capital Economics, in a Wednesday note.

The collapse of Lehman Brothers Sept. 15, 2008 thrust the arcane but crucial financial plumbing of the money markets into the spotlight as banks grew reluctant to make necessary short-term loans to each other, freezing the global financial system and driving the world economy to the brink of catastrophe.

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