Short-term borrowing costs in the U.S. have risen to levels unseen since the EU Debt Crises in 2011.

Recent moves in two closely watched indicators - the London Interbank Offered Rate (LIBOR) and its spread with the Overnight Index Swap (OIS) Rate - are causing some nervousness. The spread has expanded to its widest level of this decade. The LIBOR-OIS spread represents the difference between an interest rate with some credit risk built in and one that is virtually free of such hazards. Therefore, when the gap widens, it's a good sign that the financial sector is on edge.

Insight- Such high level of LIBOR OIS spread have generally coincided with sliding financial sector stock prices. The recent fall in global equity markets is a reflection of this brewing risk.