Some banks have considered no longer using Libor as a benchmark for interest rates on loans. Intercontinental Exchange Inc., which took over administering the measure earlier this year, has implemented new licensing fees, according to the American Bankers Association.
Although the extent at which ICE will apply the new fees is still unclear, they seem to be a result of essentially all uses of the benchmark, including a bank having a single old loan on their books to them participating in syndications or signing derivatives agreements, said Denyette DePierro, senior counsel at ABA, in a phone interview with Bloomberg
However, banks that contribute Libor rates to ICE, including JPMorgan Chase & Co., Bank of America Corp. and Barclays Plc, won't be effected by the new fees, according to ICE.
During the worldwide financial crisis, a surge in the rate led some companies to switch pricing on corporate loans to using a method called base rates, which make use of Federal Funds Rates, or "prime rates" established by individual banks and Eurodollar rates.
Meanwhile, Brevan Howard Asset Management LLP has rehired Chris Cecere. The Wall Street Journal has reported that Cecere was accused by Japanese authorities for allegedly attempting to rig Libor in 2011, citing insiders with knowledge of the matter, according to Reuters.
Risk Disclosure
The StoneX Group Inc. group of companies provides financial services worldwide through its subsidiaries, including physical commodities, securities, exchange-traded and over-the-counter derivatives, risk management, global payments and foreign exchange products in accordance with applicable law in the jurisdictions where services are provided. References to over-the-counter (“OTC”) products or swaps are made on behalf of StoneX Markets LLC (“SXM”), a member of the National Futures Association (“NFA”) and provisionally registered with the U.S. Commodity Futures Trading Commission (“CFTC”) as a swap dealer. SXM’s products are designed only for individuals or firms who qualify under CFTC rules as an ‘Eligible Contract Participant’ (“ECP”) and who have been accepted as customers of SXM. StoneX Financial Inc. (“SFI”) is a member of FINRA/NFA/SIPC and registered with the MSRB. SFI does business as Daniels Trading/Top Third/Futures Online. SFI is registered with the U.S. Securities and Exchange Commission (“SEC”) as a Broker-Dealer and with the CFTC as a Futures Commission Merchant and Commodity Trading Adviser. References to securities trading are made on behalf of the BD Division of SFI and are intended only for an audience of institutional clients as defined by FINRA Rule 4512(c). References to exchange-traded futures and options are made on behalf of the FCM Division of SFI.
Trading swaps and over-the-counter derivatives, exchange-traded derivatives and options and securities involves substantial risk and is not suitable for all investors. The information herein is not a recommendation to trade nor investment research or an offer to buy or sell any derivative or security. It does not take into account your particular investment objectives, financial situation or needs and does not create a binding obligation on any of the StoneX group of companies to enter into any transaction with you. You are advised to perform an independent investigation of any transaction to determine whether any transaction is suitable for you. No part of this material may be copied, photocopied or duplicated in any form by any means or redistributed without the prior written consent of StoneX Group Inc.
© 2021 StoneX Group Inc. All Rights Reserved
