FCA warns against use of ‘credit-sensitive’ rates in place of Libor
Banks should tell the FCA if they plan to use such rates and consider the risks “carefully”
The Financial Conduct authority has warned banks to not use “credit-sensitive rates” when the switch away from the London Interbank Offered Rate (Libor) benchmark occurs later this year.
Edwin Schooling Latter, the FCA’s director of markets and wholesale policy, said authorities in both the UK and US have warned publicly about the risks associated with “credit-sensitive” rates.
“We don’t want to see transition to new so-called ‘credit-sensitive’ rates such as Bloomberg’s Short Term Bank Yield
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