SNB’s Moser says ending LIBOR will not affect monetary policy

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

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