BSBY swap fallbacks too flimsy for BMR – FCA

Pressure piles on SOFR alternative as US, UK regulators axe their role in Isda replacement waterfall

Contracts referencing Bloomberg’s Short-Term Bank Yield index, or BSBY, have been pushed further out of reach after a key regulator warned that fallbacks contained in interest rate swap definitions devised by the International Swaps and Derivatives Association are too flimsy to comply with the UK Benchmarks Regulation (BMR).

Isda has produced so-called fallback language within its interest rate definitions, which sets out a process for shifting instruments to an alternative benchmark should the