LIBOR rates represented the average rate at which a panel of banks could obtain wholesale unsecured funding, but due to concerns regarding its integrity, credibility, and vulnerability to manipulation, regulators determined that it was no longer a representative benchmark rate and should not be used going forward. As a result, in 2017 global regulatory bodies embarked on a global IBOR reform effort and developed a phased transition approach from LIBOR to alternative reference rates for all currencies and tenors.
The majority of the Bank's financial instruments, including loans, debt, investments, and derivatives, were tied to US dollar LIBOR. To comply with regulatory requirements, the IDB transitioned all its financial products to the Secured Overnight Financing Rate (SOFR), the rate selected as the replacement for LIBOR in US dollar-based instruments. The final cessation date for US dollar LIBOR tenors was June 30, 2023.
This web page serves as a central location for information on LIBOR transition generally, as well as specific information on IDB’s transition from LIBOR to SOFR. Key resources and links are below.
Did you know that the London Interbank Offered Rate, also known as LIBOR, will undergo big changes? This video will provide you with the background to understand the complexity and challenges facing the financial markets as the 2021 LIBOR transition deadline approaches.
The London Interbank Offered Rate, also known as LIBOR, is being phased out in a global financial market transition. This material will provide you with updated information on global regulatory actions, market updates on LIBOR and replacement rates, and details on how the IDB is implementing LIBOR transition for loans and borrowers as well as the Bank’s funding.