A discussion on LinkedIn showed how much confusion the existence of "manipulated" LIBORs has been causing.

Paul Travers from Oakvale Treasury wrote 'From an Australian perspective, I am glad to see Aud Libor go, as for the past couple of years it has been set well above the local benchmark, BBSW (Bank Bill Swap Rate), and cause issues with some of our clients who are subsidaries of European companies. They would receive a valuation for an AUD derivative (and rate set against BBSW) from their parent company based on a curve constructed using A$LIBOR. This valuation was very different to the valuation they would receive from their local valuation advisor and the bank.'

The alternatives to LIBOR are described in the ACT's excellent briefing note. But Michelle Price from ACT stressed that: 'Whilst alternatives to LIBOR could be "widely used locally published rates" each user should perform the necessary due diligence to determine the most relevant benchmark rate that matches their requirements.'

 

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At least the confusion between head office and the subsidiaries will be reduced by the removal of LIBOR in these markets. But, sadly, the manipulative bankers will still remain.