SNB deputy governing board member Moser out on the wires 22 Sept
- LIBOR ( London Interbank Offered Rate) benchmark now in serious jeopardy but moving away from it will not affect SNB's ability to carry out mon pol
- transition away from LIBOR will be demanding for pvt sector
- work on planning transition to alternative reference rate should start now
- it's up to market participants to choose an alternative rate to LIBOR and carry out a timely transition
Eh ? I thought it was "market participants" that abused LIBOR in a number of countries and created the need for re-assessment. Talk about putting drunks in charge of a brewery.
I first reported the intended changes back in July
The SNB has been targeting 3-mth swiss franc libor since 2000 but will discontinue that link in 2021 as UK regulators and others seek to replace the scandal-associated indicator.
Says Moser:
"Despite all the measures that have been taken it seems impossible to re-establish LIBOR as a credible robust and resilient benchmark
Central banks are capable of controlling the level of short-term interest rates in a number of ways. In particular the policy stance is not tied to the existence of a specific reference rate. This is also the case for the SNB."
For the record around CHF 6trln worth of contracts use LIBOR as a benchmark, making it the most important Swiss interest rate.
SNB replacing LIBOR in 2021
