The transition from LIBOR will cause massive disruption.
It is high time the loan market addressed the challenges
collectively, says Mark Jones, of TMF Group Capital Markets
Services after the LMA Summit.
Following the UK's Serious Fraud Office decision to close
its long-running investigation into the manipulation of the LIBOR
(London Interbank Offered Rate) benchmark rate, the banking
industry needs, urgently, to get to grips with replacing it. In the
seven years since it emerged that certain banks had been involved
in fraud, collusion and the manipulation of markets, attempts to
succeed LIBOR with a universally accepted risk-free successor have
not proved satisfactory.
LIBOR is a measure of the average rate at which banks are
willing to borrow wholesale unsecured funds. It's widely used
as a reference rate in loan and derivatives documentation. It is
actively published for five currencies: US Dollars, Euros, Japanese
Yen, Pounds Sterling and Swiss Francs. To
