LIBOR (London Inter-Bank Offered Rate) is the most widely used interest rate benchmark worldwide and has a central role in today’s financial system. LIBOR provides an indication of the average rate at which a panel of banks could obtain wholesale unsecured funding and since it is only indirectly linked to transactions, regulators believe LIBOR is not a viable benchmark going forward. Concerns result from the limited liquidity and transactions underlying LIBOR indexes in many jurisdictions.
The transition from LIBOR to an alternative reference rate is a challenging undertaking. Transitioning from a benchmark that is used as a reference rate for over 240 trillion dollars worth of financial contracts raises a host of questions and concerns. As regulators push the market towards adopting a replacement rate that is based on frequent and observable transactions, here at the IDB we are proactively and strategically positioning ourselves to guide the bank and our member countries through this transition.
To help address the challenges related with the transition, we have launched this page to serve as your primary resource for all topics related to the LIBOR transition, with the intent of keeping our members informed of recent market developments.
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