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Richard Sandor has been called the father of futures trading and carbon trading. His latest passion is a fledgling reference rate that is being used by a collection of small U.S. banks to price wholesale interbank financing.
The London interbank offered rate will likely be replaced by a new reference rate that critics say is better suited for the derivatives market than it is for commercial lending.
After a long and ultimately successful battle to exempt managers from risk retention rules, it may be hard to engage participants in the search for a suitable replacement for Libor.
The London interbank offered rate has its faults, but at least it compensates for counterparty risk; not so the benchmark being touted as a replacement.
The ICE Benchmark Administration is changing how banks submit interbank interest-rate quotes used to derive daily Libor rates.
