Benchmark reform could hit cross-currency basis

Traders criticise fragmented development of new risk-free rates

Currency-based working groups are taking different approaches to new reference rates

A lack of co-ordination between working groups looking to replace Libor in swap contracts could have a knock-on effect on cross-currency basis rates, derivatives users warn.

The groups, which are set up by currency, are looking to identify alternative risk-free rates (RFRs) that could be used in derivatives contracts instead of existing benchmarks such as Libor. But with some groups leaning towards secured rates and others considering unsecured, there are fears this fragmentation could have an