Search
 

Proposed Changes to Libor

Libor is going away and there is no final decision on what index will be used to replace it. Due to the manipulation of Libor by a few bankers in London,…

By Joel Ross | Updated on September 25, 2017

Joel Ross

Libor is going away and there is no final decision on what index will be used to replace it. Due to the manipulation of Libor by a few bankers in London, Libor will cease to be the index as it turned out it was never a real number. It was simple what a small group of London bankers decided it would be, and they made it so they could trade on it and generate illegal profits to their own book. It is proposed to now change it to a actual rate based on real transactions as measured by independent sources.

The US is proposing using the Treasury repo rate to be published by the NY Fed daily. This is known as the Broad Treasury Financing Rate -BTFR, and is based on around $660 billion of trades daily.  It is a fluid and real market. It is the cost of overnight loans collateralized by US government debt.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?

NOT FOR REPRINT

© 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.

GlobeSt

Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2024 ALM Global, LLC. All Rights Reserved.