LIBOR has taken
longer to exit the stage than Lawrence Olivier, but the final curtain call is
coming for the index. The Consumer Financial Protection Bureau (CFPB) has now
finalized the rule for how creditors must select replacements for LIBOR, the London
Interbank Offered Rate, once used for adjusting many financial products
including derivatives and adjustable-rate mortgages. The CFPB release says no new financial contracts may reference
LIBOR as the relevant index after the end of 2021 and it cannot be used for
existing financial contracts as of June 2023. LIBOR’s demise
began in 2012 after it was revealed that a number of large international banks
were falsely inflating or deflating their rates so as to profit from trades, or
to give the impression that they were more creditworthy than they were. The dates for ending its use have been repeated extended
to allow for an orderly transition.


…(read more)

Forward this article via email:  Send a copy of this story to someone you know that may want to read it.
Generated by Feedzy