LONDON (Reuters) – The European Union on Wednesday called on Britain and the United States to limit litigation by agreeing how to price legacy contracts after the tarnished Libor interest rate is scrapped.
FILE PHOTO: European Union flags flutter outside the EU Commission headquarters in Brussels, Belgium May 5, 2021. REUTERS/Yves Herman/File Photo
After banks were fined billions of dollars for trying to rig the London Interbank Offered Rate or Libor, regulators want it replaced in contracts from home loans to credit cards worth trillions of dollars globally in one of the biggest market switches in decades.
Libor, compiled in several currencies like the dollar, sterling and yen is being largely scrapped in contracts from the end of December and replaced by rates compiled by central banks.
Britain and the United States are working on what alternative rates would be used in legacy contracts that cannot shift to the central bank…