Fund managers slow to ditch LIBOR-linked benchmarks

Bank of England urges users to 'accelerate' transition

Asset managers are only just beginning to take action to replace LIBOR-linked benchmarks on their fund products after repeated warnings from regulators and market participants about the risk posed by continued exposure to the crisis-hit rate, which will cease to exist in 2021.

The London Interbank Offered Rate (LIBOR) is currently the world's most widely-used reference rate, providing a benchmark for about $350trn worth of financial products, according to legal firm Ashurst. However, a big shake-up is looming as bank traders were found to have been manipulating LIBOR in the wake of the Global Financial Crisis, leading to around $9bn in fines, several convictions and ultimately the decision by regulators to phase out LIBOR altogether by 2021. In July, the Bank of England warned the continued reliance of global financial markets on LIBOR is a threat to financ...