For the first time since May 2007, Libor has returned to a normal level, prompting economists to say the credit crunch has ended. "This marks a return to normal territory and gives us hope that we can cope with anything that comes now," said Peter Chatwell, an interest-rate strategist at Credit Agricole's Calyon. "It indicates that the banks are well capitalised, with no more surprises. It gives us hope that we have a functioning banking system and that we can now go about the job of running the broader economy."

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