20 years: Interest rate benchmarks
In the previous 2 videos of this series, John and Keith explained what LIBOR is and why it exploded from being an obscure number published in London at 11am every day by a small trade association, to being a focus for central banks and regulators everywhere. In this video John talks about the timelines published by regulators and central banks, their expectations for market participants, and the differences between the game plans to replace IBOR rates in various major markets.
In the previous 2 videos of this series, John and Keith explained what LIBOR is and why it exploded from being an obscure number published in London at 11am every day by a small trade association, to being a focus for central banks and regulators everywhere. In this video John talks about the timelines published by regulators and central banks, their expectations for market participants, and the differences between the game plans to replace IBOR rates in various major markets.
12 mins 51 secs
LIBOR applies to a wide variety of financial instruments, from structured over-the-counter derivatives to listed futures, bonds, commercial loans and retail mortgages. As we know regulators and central banks have concluded that LIBOR can not be made into a benchmark that is appropriate for markets in this age, despite heroic efforts to reform. They have given us a countdown to move away from LIBOR by the end of 2021. LIBOR, or its equivalent is used in every financial market in the world, which is one reason why its replacement is being driven at the highest levels globally.
Key learning objectives:
Understand the timelines issued by regulators and central banks and their expectations for market participants
Outline the differences between the game plans to replace IBOR rates in various major markets
Describe an ISDA fallback protocol