As
alerted in our
previous Advisories, LIBOR, the "world's most
important number," is being phased out. Created almost 50
years ago on August 15, 1969—opening day of the Woodstock
music festival—LIBOR began as a floating, market-determined
interest rate for syndicated loans, but over time has become the
benchmark interest rate for an estimated $350 trillion in
outstanding financial arrangements around the world. These
contracts include public and private loans and bonds; consumer
financial products such as credit cards, mortgages and student
loans, and some $200 trillion in interest rate derivatives.
Due in large part to concern that the determination of LIBOR
(formally known as ICE LIBOR) is based on fewer and fewer interbank
transactions, and therefore is an increasingly unreliable benchmark
for the global financial markets, regulators worldwide have been
working to develop alternative benchmarks. Over the past few years,
the US Federal Reserve, the UK's
