Why It Matters That the FRA-OIS Spread Is Widening

With the 2008 global financial crisis still in the rear-view mirror, the coronavirus and a plunge in oil prices have put jittery markets on the alert for signs of another credit crunch. That helps to explain why one important indicator of stress in the U.S. banking system — the FRA-OIS spread — is drawing attention. The spread has spiked to its widest level in more than eight years, even if it’s way off the highs of 2008 and 2009.