There are many reasons why attempts to ditch dollar Libor are proving difficult. One of them is that there are multiple candidates vying to replace the doomed benchmark. The UK’s Libor transition is not without its issues. But what’s helped is that a consensus has formed around the Sterling Overnight Interbank Rate, or SONIA, as the agreed-upon alternative. The situation in the US is more complex, with several benchmarks all competing for the title of Libor successor. In turn, this is leading many market players to put off replacing Libor in their financial contracts as well as slowing the process to a widely approved alternative.How the ARRC’s builtIn theory, the winner has been picked by The Alternative Reference Rates Committee, or ARRC. The group, which is made up of
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There are many reasons why attempts to ditch dollar Libor are proving...