LIBOR, or the London Inter Bank Offer Rate to give its full title, has long been considered the world’s most important number. It is a global benchmark, used across major currencies and markets to set the interest rates used by a whole range of financial products, from variable-rate mortgages to trillions of dollars of derivatives contracts.
But not for much longer.
For reasons summarised below, 2017 saw the UK’s Financial Conduct Authority (FCA) announce that as of 2021 panel banks would no longer be encouraged to submit the rates needed to calculate LIBOR. This set the clock ticking to find a suitable replacement; a process that is throwing up as many questions as answers.
This white paper provides a snapshot of what has been agreed to date and looks at where we are likely to go moving forward. It also considers how Calypso could help; where we are well-positioned in key areas to meet the new requirements – even though some still need to be finalised.