'Expect increasing scrutiny' on Libor transition efforts - FSB

Efforts to shift from Libor too slow

Pressure on banks and large asset managers to shift away from the sullied Libor interest rate by the end of 2021 will increase, a collection of regulators and central banks has warned.

The Financial Stability Board (FSB), the Basel-based group chaired by the US Federal Reserve's Randal Quarles, has warned the reluctance to ditch Libor "poses risks to financial stability". Fund managers slow to ditch LIBOR-linked benchmarks Libor is currently used to price contracts ranging from mortgages to credit cards and derivatives totalling around $400trn, but global watchdogs want to scrap this by 2021 and embrace overnight lending rates such as Sonia. "Given the degree of risk arising from continued reliance on Libor in particular, regulated firms should expect increasing ...