The TED spread is the difference between the interest rates on interbank loans and on short-term U.S. government debt ("T-bills").
Interbank lenders, therefore, demanded a higher rate of interest, or accept lower returns on safe investments such as T-bills.
On September 17, 2008, the TED spread exceeded 300 bps, breaking the previous record set after the Black Monday crash of 1987.
[6] Some higher readings for the spread were due to inability to obtain accurate LIBOR rates in the absence of a liquid unsecured lending market.
[citation needed] In October 2013, due to worries regarding a potential default on US debt, the 1-month TED went negative for the first time since tracking started.