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Libor: Why 2022 is Coming Faster Than You Think
Article

Libor: Why 2022 is Coming Faster Than You Think

AFP, 2019

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Editorial Rating

7

Qualities

  • Analytical
  • For Experts

Recommendation

In 2022, regulators will pull the plug on the long-standing, ubiquitous London Interbank Offered Rate (Libor). The global lending rate underpins a contract and transaction infrastructure of some $200 trillion, and international bankers, corporate finance departments, brokers and traders are worried that the impending expiration may have serious impacts on market stability. Financial writer Andrew Deichler examines the current environment for Libor and the new rate that may replace it. Market professionals will find this concise report extremely valuable.

Take-Aways

  • Market participants have depended for decades on the London Interbank Offered Rate (Libor) as the core metric for valuing contracts and transactions.
  • With Libor’s elimination in 2022, stakeholders will need to shift their pricing basis to the Secured Overnight Financing Rate (SOFR).
  • Market leaders cannot afford to take a wait-and-see attitude on moving from Libor to SOFR.

About the Author

Andrew Deichler is a multimedia content manager at the Association for Financial Professionals.