Introduction
In September we published a client briefing on the
LIBOR Review - key questions and answers. LIBOR,
as the key floating interest rate benchmark in the modern financial
system, is integral to the operations of the global financial
system and an estimated USD300 trillion of
existing transactions. In addition to LIBOR-based transactions, an
unquantified amount of other transactions reference similar global
benchmarks. Following the well-publicised issues in the UK relating
to the credibility of LIBOR, the government of the United Kingdom
commissioned Martin Wheatley, a managing director at the Financial
Services Authority (FSA), to prepare a review of the way LIBOR is
managed. The outcome of that review (the Wheatley Review) has now
been published. This Briefing summarises its key recommendations,
its proposal for a ten point plan and some potential consequences
if those recommendations are accepted.
