October 13, 2020
October 13, 2020
Central banks have identified LIBOR and certain other interest rate benchmarks (collectively, IBORs) as systemically unsound due to the substantial decrease in short-term unsecured interbank funding (which the IBORs represent). In response to these concerns, central bank committees across the globe have selected alternative overnight “risk-free” rates (RFRs) that are transaction-based rates to replace LIBOR in their respective currency.
Regulators across the globe, including the U.K. Financial Conduct Authority, U.S. Federal Reserve Board and U.S. Securities and Exchange Commission, have urged firms to prepare for the end of LIBOR by the end of 2021, after which LIBOR publication is no longer guaranteed.
Industry Bodies & Regulators
This is not intended to be a comprehensive summary of the IBOR transition, but it captures recent developments affecting Morgan Stanley clients.
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