LONDON: London Stock Exchange index compiler FTSE Russell began publishing forward-looking interest rates yesterday, entering a four-way race for a new market opened up by the scrapping of the London Interbank Offered Rate (Libor) next year.
Regulators want the Libor, which banks were fined for trying to rig, replaced with the Bank of England’s Sonia rate for sterling denominated swaps, loans and futures by the end of 2021.But market participants have said that the Sonia overnight rate lacks the forward-looking variants or “tenors” that Libor has, making it harder to switch some contracts like interest rate swaps.