Lawmakers have to sort ‘tough legacy’ Libor products – survey
Challenges agreeing contract amendments and lack of term rates for the risk-free alternatives are also barriers to transition
Six jurisdictions told the Financial Stability Board (FSB) they’ve identified financial products that cannot be moved off Libor, the soon-to-be-extinguished interest rate benchmark. Most said legislative action would be needed to deal with these so-called ‘tough legacy’ contracts.
Four of these jurisdictions said products like floating rate notes and securitisations have high consent thresholds
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