MONEY MARKETS-Dollar Libor rates, spreads fall broadly

* Libor falls across the board for dollars, euros, sterling

* 3-month dollar Libor at 2.50 pct, lowest since Dec. 2004

* Dollar, euro spreads narrow; sterling wider

* Strains still evident; ECB reports record o/n deposits

(Recasts, updates with Libor fixings, adds quotes, comment and context. Changes byline and dateline)

By Jamie McGeever

LONDON, Nov 5 (Reuters) - The rates at which banks lend three-month dollar funds to each other fell on Wednesday to its lowest level in almost four years, indicating severe money market strains continued to ease.

London interbank offered rates at the British Bankers' Association's daily fixing for these three-month dollars fell 20 basis points to 2.50625 percent USD3MFSR=, the lowest since December 2004.

While interbank rates remain high relative to official benchmarks, the Libor premium over anticipated official interest rates measured by Overnight Index Swaps fell below 200 basis points for the first time since the immediate aftermath of the Lehman Brothers collapse.

Euro and sterling Libor fell across the board too, although sterling Libor/OIS spreads widened.

Central banks' measures to get markets functioning again -- via liquidity provisions, currency swaps, purchases of commercial paper and other assets as well as anticipated interest rate cuts -- all help, analysts say.

However, they added that banks remained loath to lend for more than a month despite a steadying in nominal interbank lending rates and a narrowing in spreads, again mostly in U.S. dollars.

The European Central Bank said overnight deposits at the central bank were a record 295 billion euros ($378.9 billion) as of Nov. 4, while sources said China was considering a plan to help selected foreign banks secure funding in its money market.

A global economic slowdown is crimping firms' ability to borrow and banks' willingness to lend.

"Rates are falling ... which may help companies get the funding for the next 90 or 270 days but from a pure business perspective why would you lend money if the number of insolvencies is going to rise?" said Kenneth Broux, financial markets economist at Lloyds TSB in London.