In November 2020, the U.S. presidential election unfolded as a close contest between the incumbent, President Donald Trump, and the Democratic candidate, Joe Biden. Although President Trump is currently alleging election fraud, media reports view Mr. Biden’s electoral victory as certain.
Regardless of who becomes the U.S. president in 2021, one matter that must be addressed moving forward is the planned cessation of the publication of the London Interbank Offered Rate (LIBOR) at the end of 2021. LIBOR is a benchmark interest rate (rate index) recognized globally as the reference rate for various loans, bonds, financial derivatives, and other products. Its discontinuation necessitates a transition to other benchmark rates.
While the cessation of LIBOR’s publication may perhaps be extended, consideration of the transition is essential even if it is. The impact is not limited merely to financial institutions; it affects the businesses of many operating companies and carries the potential to develop into litigation over contract interpretation.
The website of Tokyo Kokusai Law Office (TKI Law), where our firm’s Director, Christopher Studebaker, is a member, introduces some of the litigation risks that may arise from the 2021 LIBOR cessation and the essence of minimizing those risks. We invite you to read the column.
