Bond managers take action to tackle risks from scandal-hit LIBOR phase-out

Will no longer be published from 2021

Mike Sheen
clock
The replacement LIBOR has left the future of the products it underpins uncertain
Image:

The replacement LIBOR has left the future of the products it underpins uncertain

Asset managers are facing difficult decisions on how to address concerns arising from the replacement of interest rate benchmark LIBOR in 2021, with some taking the option to offload certain holdings as quickly as possible to avoid any fallout from the changes.

The London Interbank Offered Rate (LIBOR) is currently the world's most widely-used reference rate, providing a benchmark for approximately $350trn worth of financial products, according to legal firm Ashurst. FCA bans Libor rigger Hayes However, a big shake-up is looming as bank traders were found to have been manipulating LIBOR in the wake of the financial crisis, leading to around $9bn in fines and several convictions, and ultimately the decision by regulators to phase out LIBOR altogether by 2021. In the UK, the working replacement is SONIA; a near risk-free alternative derivat...

To continue reading this article...

Join Investment Week

  • Unlimited access to real-time news, analysis and opinion from the investment industry, including the Sustainable Hub covering fund news from the ESG space
  • Get ahead of regulatory and technological changes affecting fund management
  • Important and breaking news stories selected by the editors delivered straight to your inbox each day
  • Weekly members-only newsletter with exclusive opinion pieces from leading industry experts
  • Be the first to hear about our extensive events schedule and awards programmes

Join now

 

Already an Investment Week
member?

Login

More on Bonds

Oliver Dobbs, portfolio manager, Trium Credere fund

Three reasons why convertibles thrive when rates rise

Resilient during inflationary periods

Oliver Dobbs
clock 16 August 2022 • 4 min read
Four graphs explaining... fixed income

Four graphs explaining... fixed income

Four experts write

Investment Week
clock 08 August 2022 • 3 min read
Arthur Lau of PineBridge Investments

Asia Fixed Income: on a firm foundation

US interest rates little impact

Arthur Lau
clock 20 July 2022 • 3 min read
Trustpilot