Much of the energy sector remains wedded to the use of Libor when discounting swaps, long after many other big derivatives users switched to overnight indexed swap (OIS) rates – a situation one energy industry veteran described as “a big mess”.
“Right now what we have is a mess,” said Vincent Kaminski, professor at Rice University’s Jesse H Jones Graduate School of Management. “There are some institutions that are using OIS. There are some institutions that are using Libor. There are some