US Libor panel to propose fallback language for loan contracts that reference Libor

31 October 2018 7:25am
The US Federal Reserve-sponsored panel overseeing the transition from US-dollar Libor said it plans to seek public input by March 2019 on a proposal for fallback language for new bilateral loan and securitization contracts that reference the benchmark.

The proposal seeks to ensure that these contracts will still be effective in the event that the scandal-plagued London Interbank Offered Rate is no longer usable — a likelihood by 2025 because of its waning market, a senior Fed official has said.

The Alternative Reference Rates Committee, headed by JPMorgan Chase's Chief Regulatory Officer Sandra O’Connor, said Tuesday it also plans to seek public input at an unspecified time on fallback language for other cash-product contracts including those for consumers.