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6

This question is the subject of much current debate amongst regulators and banks. You are absolutely correct , many banks are alarmed that the demise of Libor will make their asset-liability management more difficult. Historically , banks have originated loans linked to Libor , reasoning that they will be able to pass along fluctuations in their funding ...


4

Here's my take on this. Firstly, in my experience, banks do not raise financing as a function of Libor, but rather as a function of the local Central Bank policy rate. As an example, the Czech Central Bank provides a 14-day reverse-repo facility ("the main financing rate"), whereby it lends govies for two weeks in exchange for cash, on which it ...


1

Good question. There are two things to consider: SOFR Swap curve USD LIBOR Swaps that will fall back onto the 90-day backward-compounded spot SOFR + a fixed spread. To my knowledge, SOFR swaps (i.e. 1 above) are already liquid and trade heavily: after all, London Clearing House switched to SOFR discounting from Fed-Funds discounting last year: these "...


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