Concerted efforts by central banks to intervene in the economy with interest rate cuts, capital injections and debt guarantees has led to a steady fall in the London interbank borrowing rate in the past few weeks, suggesting banks are finally beginning to trust and lend to each other again.

In the UK, the sterling three-month Libor rate, which shows the rate banks are willing to lend to each other, has been steadily decreasing over the past month.