i see! Thanks alot. 7% is very unbelivably low.
assumes most participants in the economy only need less than 7% cash??
and they(banks) could still have extra cash to cover up astronomical loss on CDO and at the same time deal with withdrawal by savers who's lost confidence on them...
i'm a financial idiot. so asking for expert who can tell me why banks borrow money from other banks everyday and would collapse when fail to do so? what's the consequence of high Libor? Thanks!