FCA’s synthetic Libor plan could trigger US legal disputes

Tough legacy solution threatens to override existing fallbacks in some US law contracts

USD-Libor-legal-disputes

The UK Financial Conduct Authority’s plan to compel the publication of a synthetic version of US dollar Libor could generate a wave of legal disputes over whether loan contracts governed by US law can re-hitch to contractually agreed alternative rates in June 2023.

Synthetic US Libor is intended to deal with a tail of international ‘tough legacy’ contracts that are not covered by a US legislative fix – the US Libor Act, which provides a safe harbour for US law contracts to be switched over to

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