Remember when clients were taking out adjustable rate loans - most of them chose an index based on a regional cost of funds, but some of them chose a rate based on Libor, the London interbank offered rate, because they thought it was less volatile.
The Wall St Journal reported this morning that the overnight dollar Libor soared to the largest jump on record - from 3.10625% to 6.4375%! In just a day the rate more than doubled! This is the overnight rate, but longer term Libor rates also rose, but nowhere near as drastically.
