FCA’s synthetic Libor plan could trigger US legal disputes

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


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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