Credit conditions among banks improved for a sixth consecutive trading day on Monday, particularly in the U.S., as confidence in the financial sector appeared to be improving after the rescue measures announced in recent weeks by central banks and governments.
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Instead of worrying about other banks collapsing, credit markets are back to being where they were at the start of the year, with banks holding on to cash in case one of their own funds goes under, Dixon said.
When banks are comfortable that they can borrow in the short-term from other banks, they can lend to businesses and to individual mortgage-seekers.
