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The State of New York has enacted a new law that should ease the transition away from US dollar LIBOR for legacy financial contracts that are governed by New York law but do not contain modern benchmark fallback provisions. A similar federal law is in the works, which if passed would apply nationwide.
The London Inter-Bank Offered Rate, or LIBOR, is a global interest rate benchmark index based on the average of the inter-bank offered rates for deposits of various currencies and durations in the London market based on quotations of major banks. Floating interest rates embedded in many types of financial contracts, including loans, derivatives, and bonds, are often calculated by reference to LIBOR, with a spread of a given number of basis points.
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Global Derivatives Market Embraces Pact to Preempt Libor Pain
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