Banks are being warned that supervisors – especially in the UK – could use additional capital requirements on contracts that reference Libor as a way to speed the transition to newer benchmarks considered less vulnerable to manipulation. “The prospect of putting capital against potential Libor exposures may need to happen to get firms moving fast on this issue. That is probably only likely once the risk is identified and taken on balance sheet. If the large banks were to do this, then you could Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content. To access these options, along with all other subscription benefits, please contact [email protected] or view our subscription options here: http://subscriptions.risk.net/subscribe You are currently unable to print this content. Please contact [email protected] to find out more. You are currently unable to copy this content. Please contact [email protected] to find out more.
The UK Government has warned it is considering a Pillar 1 Bill that would impose extra capital requirements on contracts linked to LIBOR as it seeks to speed up the transition to SONIA .