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Libor: Why 2022 is Coming Faster Than You Think

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Libor: Why 2022 is Coming Faster Than You Think

AFP,

5 min read
3 take-aways
Audio & text

What's inside?

Regulators are winding down the London Interbank Offered Rate (Libor), but markets may not be ready.


Editorial Rating

7

Qualities

  • Analytical
  • For Experts

Recommendation

In 2022, regulators will pull the plug on the long-standing, ubiquitous London Interbank Offered Rate (Libor). The global lending rate underpins a contract and transaction infrastructure of some $200 trillion, and international bankers, corporate finance departments, brokers and traders are worried that the impending expiration may have serious impacts on market stability. Financial writer Andrew Deichler examines the current environment for Libor and the new rate that may replace it. Market professionals will find this concise report extremely valuable.

Summary

Market participants have depended for decades on the London Interbank Offered Rate (Libor) as the core metric for valuing contracts and transactions.

Libor represents an average global short-term interest rate widely used in pricing loans and other financial transactions. As of 2022, corporate finance departments, the investment sector and the international banking industry will no longer have Libor at their disposal as a benchmarking mechanism. Today, corporate, financial and investment stakeholders hold more than $200 trillion in Libor exposure...

About the Author

Andrew Deichler is a multimedia content manager at the Association for Financial Professionals.


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