LIBOR has been the primary reference rate for Swiss and global financial markets for decades, however following several rate manipulation scandals and the subsequent decrease of volumes in transactions, it is apparent LIBOR is in decline. The decision by the FCA and other regulators to stop Libor contributions in 2021 makes a transition to alternative rates inevitable.

This poses great challenges to Swiss financial institutions, notably due to the uncertainties around the required amendments of the current Swiss regulatory and financial framework as well as the extent to which Libor is used at all levels and divisions of financial institutions. Financial instruments such as securities would be affected by the new reliance on alternative rates, Swiss banks and market players should be prepared for this new development.