Fed frustrate about rising LIBOR

There are disagreements about why the rate is rising. Fed officials attribute the recent Libor rise to European banks' needing to borrow in dollars, because the pressure tends to slacken around midday in the U.S. when the European day ends. U.S. banks have tended to retain their dollar holdings until the end of the day in New York, making it even harder for overseas banks to obtain dollars. European officials aren't convinced demand from European banks for dollars is the source of the trouble. Since March 11, the amount on offer at ECB's swap line has been a relatively modest $30 billion. In each of three $15 billion auctions it has held since then, demand hasn't been overwhelming, suggesting to some European officials that European banks aren't desperate for dollars. The ECB also saw prior global central-bank maneuvers as partly a symbolic effort to try to calm markets. Still, newly elevated rates in the interbank are prompting discussions among central bankers about possible solutions. Options on the table for the ECB include making more than the current $30 billion of dollars available, as well as extending the term of the swap line beyond the current Sept. 30 deadline