Replacing Familiar Benchmarks: Preparations to Phase Out the IBORs

ThinkingCapMarkets Podcast Series

Peter J. Green and James Schwartz

10/20/2017

Banking + Financial Services, Capital Markets, Derivatives + Commodities, Derivatives + Commodities Regulation, Financial Institutions | Europe, Financial Institutions + Financial Services, and Financial Services

Audio

Long a mainstay of the financial world, the floating “IBOR” rates, based on the rates of actual or purported interbank offered loans, are now being swept slowly into the dustbin of history. The quantity, in both number and size, of existing financial products based on these floating rates is enormous, with the outstanding principal amount of such transactions globally estimated to be in the hundreds of trillions of dollars. IBORs are used extensively in numerous currencies as bases for floating rates in a wide range of transactions including derivatives, structured products, mortgages, floating rate securities and other consumer and commercial loans. A phase-out of the use of familiar benchmarks will therefore be a massive undertaking that will take many years to accomplish.

Morrison & Foerster’s Peter Green and James Schwartz discuss recent developments in relation to IBOR rates, their likely phase out, possible replacements and issues for market participants in this ThinkingCapMarkets podcast. Our more comprehensive article on this topic can be accessed here: Replacing Familiar Benchmarks: Preparations to Phase Out the IBORs

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