LONDON (Reuters) - The time has come for financial firms to make their “last orders” based on the discredited interest rate benchmark Libor, a deputy governor of the Bank of England said on Wednesday.
“Firms need to be focused on what they need to do to be able to transact Sonia-based products, and stop adding to their post 2021 Libor exposures,” Dave Ramsden said in a speech.
Libor reflects borrowing costs among banks and is based on quotes submitted by lenders. It is used as a price reference in financial contracts and derivatives worth $350 trillion (£275.5 trillion).
But banks have been fined $9 billion for trying to rig the benchmark and it is being replaced in Britain by the Bank of England’s Sonia overnight rate.
Writing by William Schomberg, Editing by Paul Sandle