BoE Warns of LIBOR Replacement

  • The Bank of England warns that markets should not replace LIBOR with alternatives that could end up with the same flaws that made LIBOR manipulation easy. Regulators wanted to replace LIBOR with a risk-free rate such as SONIA. Some US bankers have called for SOFR
  • These rates, while good as short-term supplement, may contain long term risks. It was not clear to what extent alternative credit sensitive benchmarks have truly addressed the weaknesses of Libor