Law360, London (March 29, 2021, 4:53 PM BST) — Britain’s financial watchdogs told banks on Monday to write an alternative risk-free benchmark rate into new derivatives contracts from May as markets work toward ditching the scandal-hit Libor by the end of the year.
The Financial Conduct Authority and the Bank of England said that they are encouraging banks to reference the Sterling Overnight Index Average, known as Sonia, instead of the London Interbank Offered Rate from May 11.
Libor, which underpins trillions of dollars of contracts, lost favor amid market manipulation scandals. Traders were found to have engineered the rate for their financial gain, and some went to prison. The…
