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Big financial firms ready to scrap Libor, Moody's says

FILE PHOTO: The sun rises behind Canary Wharf financial district in London, Britain, September 14, 2020. REUTERS/Hannah McKay

LONDON (Reuters) - Moody’s said on Tuesday that a survey of 85 large banks and insurers showed they have plans in place to end using the tarnished Libor interest rate benchmark by the end of 2021.

Regulators want Libor scrapped after banks were fined for trying to rig the benchmark, which is used in financial contracts worth trillions of dollars globally.

“All of the financial institutions Moody’s surveyed this year said they now have transition plans in place, compared with a year ago when only around two-thirds of banks, and one-third of non-bank financial institutions had plans,” the ratings agency said in a statement.

Most of those surveyed said that COVID-19 disruption would not delay the phase-out and only affect interim milestones, Moody’s said.

“Most institutions we surveyed still expect transition costs to be split between lenders and borrowers,” said Olivier Panis, vice president, senior credit officer at Moody’s Investor Service.

Reporting by Huw Jones; editing by Simon Jessop

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