A report issued last week by the Federal Reserve’s Alternative Rates Reference Committee (ARRC) shows the urgency and challenges of moving off of LIBOR as a reference rate for OTC derivatives contracts. It also affirms the need of major banks to find a solution since both LIBOR and Fed Funds are not only broken, but LIBOR is already changing and Fed Funds has been declared defunct already by the Fed. Here’s what’s going on.
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