Explain how the information content of this figure can be used to inform: (i) policymakers and (ii) practitioners. If you were an investor, what concerns would you have about credit- and liquidity-risk across time? – Essaylink

Describe Figure (hint: you can start by defining the derivative that is depicted and build from there). Explain how the information content of this figure can be used to inform: (i) policymakers and (ii) practitioners. If you were an investor, what concerns would you have about credit- and liquidity-risk across time?
Figure 3: Euribor and OIS rates and spreads

3M EURIBOR and OIS rates _ .
100i
0
200-
150 100-
50
3M and 12M EURIBOR-OIS spread

■ 0 , i , , , . , , Aug 2007 Apr-2008 Dec-2008 Aug-2009 Apr-2010 Dec-2010 Sep-2011 May-2012 Jan-2013

Note: The top panel reports the 3-month Euribor (light gray) and the 3-month OIS (dark gray). The bottom panel reports the spread between the Euribor and the OIS rates across two maturities: 3-month maturity (dark gray) and 12-month maturity (light gray). The vertical axis reports annualized interest rates in basis points

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