Transactional data used to calculate sterling Libor all but vanished as markets became volatile in March, reinforcing the case for abandoning the benchmark, Bank of England Governor Andrew Bailey said in a speech on Monday.
To set Libor, which underpins hundreds of trillions of dollars in assets around the world, banks submit market data, or — when these numbers are lacking — use their own estimates to inform submissions. That process has prompted questions about the benchmark’s accuracy, and helped fuel a years-long push to replace it.
“Over half of the 35 published Libor rates across all currencies contained no transaction-based submissions at all” during the week of March 16, Bailey said. “At the same time, Libor rates, and therefore costs for borrowers, spiked upwards based on firms’ expert judgment.” Transaction-based submissions in three-month sterling Libor dropped to zero during the week of March 16, according to Bailey.
Regulators began phasing out the Libor benchmark after European and U.S. banks were found to have manipulated rates to benefit their own portfolios, with lenders and companies supposed to make the leap over the next 18 months.
We have summarized this news so that you can read it quickly. If you are interested in the news, you can read the full text here. Read more:
Australia Australia Latest News, Australia Australia Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
BUSINESS MAVERICK ANALYSIS: The ANC and business are still talking past each otherOn Friday 10 July, the ANC and Business for SA (B4SA) released policy documents outlining blueprints for an economic recovery. While finding common ground on a couple of points, they are still depressingly far apart.
Source: dailymaverick - 🏆 3. / 84 Read more »
BUSINESS MAVERICK: Government drags its feet on retirement benefits reformLast week, National Treasury and Cosatu officials met for the third time since April to consider giving retirement fund members access to their savings to mitigate the loss of income due to the Covid-19 lockdown and subsequent economic downturn. However, there is still no consensus.
Source: dailymaverick - 🏆 3. / 84 Read more »
BUSINESS MAVERICK OP-ED: Keep an emergency fund, particularly if you are a pensionerIf there is anything that the coronavirus pandemic has taught us, it’s that you should always have an emergency fund. But how big it should be might be surprising.
Source: dailymaverick - 🏆 3. / 84 Read more »
Business Maverick: Building back better for an investable futureThe COVID-19 emergency has accelerated the already growing focus on environmental, social and governance performance within asset management. Even before the outbreak, 2020 had looked set to be a watershed year for ESG with climate change putting the industry at the edge of a fundamental reshaping of finance. The ability to deliver against an ESG agenda will come to define outstanding performance and provides a significant opportunity and brand credentials at Old Mutual Investment Group (OMIG) for fund development and investment differentiation.
Source: dailymaverick - 🏆 3. / 84 Read more »