Proposed reforms in the way Libor is compiled could lead to more volatility in short-term bank funding, Reuters reports.
On Friday, British regulators unveiled a proposed overhaul that includes increasing the number of banks that submit data and requiring banks to back up estimates with information about other market rates.
JPMorgan money market Alex Roever notes that after Barclays reached a settlement with the U.S. Commodity Futures Trading Commission, a settlement that required it to substantiate its submissions by citing other rates, the volatility in its Libor submissions increased.
And adding more banks could mean bringing in banks with lower ratings, which in turn could boost Libor.
See the full story here. For more on plans to fix Libor, see FSA to Oversee Libor in Overhaul.
Complete your profile to continue reading and get FREE access to Treasury & Risk, part of your ALM digital membership.
Your access to unlimited Treasury & Risk content isn’t changing.
Once you are an ALM digital member, you’ll receive:
- Thought leadership on regulatory changes, economic trends, corporate success stories, and tactical solutions for treasurers, CFOs, risk managers, controllers, and other finance professionals
- Informative weekly newsletter featuring news, analysis, real-world case studies, and other critical content
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the employee benefits and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
*May exclude premium content© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
