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UK’s Association of Corporate Treasurers advice on practical alternatives to LIBOR for AUD, CAD, DKK

LIBOR is currently published for ten currencies and fifteen maturities. The ACT regards the availability of reference rates such as BBA LIBOR as very important and functioning as a significant public good. For users, the focus is on utility: reliable and representative rates available in a timely manner each business day.

The problem is that many banks (we are slowly learning how many) manipulated the rates for their own gain. The Wheatley Review of LIBOR final report, released in September 2012 recommended that the publication of all LIBORs for the AUD, CAD, DKK, NZD SEK be discontinued. This will start happening from the end of February. This leaves the issue what to use instead.

The ACT's briefing note sets out some alternatives to LIBOR for the withdrawn currencies. They stress that 'ACT is not in a position to be able to endorse alternative benchmark rates. By the inclusion of alternative rates, the ACT does not assert they are preferred to LIBOR in their local markets nor are we recommending them; we are listing them as options for corporates in considering the most relevant benchmark rate that matches their requirements.' The note reviews in detail the alternatives for each currency.

Read more in the full ACT briefing note - recommended - here.

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