LIBOR is used as a reference rate for financial contracts worth trillions of dollars. But what happens if, after 2021, LIBOR or another interbank offered rate ceases to exist while contracts are still referenced to that rate? That’s where benchmark fallbacks come in.
This short animation video explains what fallbacks are and why they are necessary, and explains the process for implementing them in new and legacy cleared and non-cleared derivatives trades.
For more information on fallbacks and benchmark transition, visit the ISDA website.
If you can’t access the YouTube video above, please click here (best viewed in Chrome).
This video is also available on ISDA’s Facebook page.
Latest
Global Trading in INR Derivatives
Global trading in derivatives involving the Indian rupee (INR) has expanded significantly over the past decade, reflecting the currency’s growing role in international hedging and trading activity. According to the Bank for International Settlements (BIS) Triennial Central Bank Survey, the...
Response to FCA on Commodity Derivatives Clearing
On April 9, ISDA, the Commodity Markets Council Europe (CMCE), Energy Traders Europe (ETE) and FIA jointly responded to Chapter 7 of the UK Financial Conduct Authority’s (FCA) Quarterly Consultation CP26/8 on increasing the clearing threshold for commodity derivatives under the UK...
Response on EC’s SFR Proposal
On April 9, ISDA published technical comments on the European Commission’s (EC) proposed Settlement Finality Regulation (SFR) as it applies to designated EU systems and registered third-country systems. One significant concern is that the scope of insolvency protections provided to...
Natixis CIB Adopts ISDA’s DRR
ISDA has announced that Natixis CIB has adopted ISDA’s Digital Regulatory Reporting (DRR) solution, enabling the bank to meet regulatory reporting requirements more efficiently and accurately. The ISDA DRR uses the Common Domain Model (CDM) – an open-source data standard...