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Libor Needs a Legislative Fix Even If Demise Has Been Delayed

  • Many legacy contracts will outlive new mid-2023 deadline
  • ARRC’s Wipf says need to address them still ‘front and center’
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Delaying the end of dollar Libor until mid-2023 may provide breathing room, but it doesn’t remove the need for a legislative solution for contracts that will still be linked to the benchmark when it eventually expires.

That’s the view of Tom Wipf, who heads the Federal Reserve-backed group responsible for guiding the shift away from the London interbank offered rate in the U.S. There may be hundreds of billions of dollars of legacy contracts that lack a clear replacement rate and pose a threat to financial stability, meaning that policy makers still need to find answers.