TED spread

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Credit risk.

TED is an acronym for Treasury EuroDollar rate.


TED spread is the difference (spread) in interest rates between:

  • US government 3-month borrowing rates, considered effectively risk-free; and
  • 3-month interbank interest rates, such as 3-month US dollar LIBOR


The greater the TED spread, the greater the measure of credit risk on the banks in the interbank market.


See also

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