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.
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