Legislative fix sought for Libor fallbacks

Federal law makes it “almost impossible” to change benchmark rates for FRNs

Federal Reserve Bank of New York
Federal Reserve Bank of New York

Replacing Libor as the benchmark for $1.8 trillion in US floating rate notes (FRNs) may be beyond the market’s powers, an industry working group has concluded – and the New York State legislature could be asked to step in.

Many existing FRNs will convert to fixed rate instruments if Libor is no longer published after the end of 2021, when current contributors are free to abandon the moribund benchmark. Other notes have no contractual back-up provisions at all. Around half the outstanding $1.8

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