Rechtsfragen des LIBOR-Wegfalls

For decades, the LIBOR has been the most widely used benchmark interest rate for financial contracts. At the end of 2021, following major manipulation scandals and a dwindling reliability of the rate as a benchmark, LIBOR will be discontinued for most currencies including the Swiss franc. As numerous LIBOR agreements such as credit agreements or capital market instruments (mainly OTC interest rate swaps) do not provide for any fallback mechanisms for this scenario (so called “tough legacies”), there are considerable legal uncertainties for parties thereto. To avoid the consequences of a disordered cessation of the LIBOR, Swiss financial markets authority FINMA has urged supervised banks to pro-actively mitigate risks and – where necessary – seek amicable solutions with their clients. Such solutions may include the mutual agreement on a “market-standard” fallback (e.g. the ISDA 2020 IBOR Fallbacks Protocol) or the conclusion of an entirely new contract. Where the parties fail to find…