LIBOR Risks Disrupting $400 Trillion Derivatives and Loan Markets.

#libor #repo #derivatives #risk #sofr #sonia

Today I look at the progress or lack thereof being made by financial institutions in phasing out the LIBOR benchmark interest rates.

Even though the use of LIBOR is supposed to be phased out by the end of 2021 according to the Financial Times "LIBOR underpins as much as $400 trillion of products around the world from loans to derivatives contracts'.

Regulators like the UK's FCA, the Bank for International Settlements and the President of the New York Federal Reserve have been warning the phase-out needs to accelerate and that the markets continued use of LIBOR poses risks to market stability.

I will also give my opinion on how the troubles in the Repo market since September 2019 could be related to the LIBOR phase-out.

"UK regulators launch fresh push to switch away from LIBOR":

"How prepared are markets for the end of Libor?":

"LIBOR: preparing for the end":

"The average adjustable-rate mortgage is nearly $700,000. Here’s what that tells us.":

"U.S. mortgage debt hits a record $15.8 trillion":

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