Interbank market meaning

This Checklist This Checklist presents, in a tabular format, the matters to address when preparing a loan that references a compounded risk-free rate (RFR) such as the Sterling Overnight Interbank Average Rate (SONIA), calculated in arrears. It explains the purpose of the key provisions, highlights issues to weigh up, and offers drafting pointers and practical guidance for practitioners. For further analysis, see Practice Note: Interest provisions in risk-free rate based loan agreements. The Checklist draws on provisions contained in the Multicurrency Term and Revolving Facilities Agreement incorporating backward-looking compound rates and forward looking term rates (lookback without observation shift) issued by the LMA (the LMA Compounded RFR Facilities Agreement). The LMA’s recommended form documentation, with accompanying user guides and commentary, is accessible to LMA members on its website. While the Checklist is prepared on the basis of LMA-style documentation, the guidance will also be relevant to bilateral transactions and agreements using other loan forms. Practice Note: Interest provisions in risk-free rate based loan agreements provides a fuller discussion and...

In this issue: Sustainable finance and ESG weekly round-up Moveable Transactions (Scotland) Act 2023 Football Governance Bill LIBOR and benchmarks Sustainable finance Debt capital markets Derivatives Regulation for derivatives lawyers Technology in banking & finance transactions Structured products and securitisation Regulation for banking lawyers Banking & Finance Highlights 2024/2025 Daily and weekly news alerts New and updated content Useful information Sustainable finance and ESG weekly round-up For this week’s coverage of Sustainable finance and ESG developments, please see: Sustainable finance and ESG weekly round–up—19 December 2024. Moveable Transactions (Scotland) Act 2023 Moveable Transactions (Scotland) Act 2023 (Commencement) Regulations 2024 SSI 2024/378: From 1 April 2025, the outstanding provisions of the Moveable Transactions (Scotland) Act 2023 (the Act) will come into effect. See: LNB News 17/12/2024 9. Moveable Transactions (Forms) (Scotland) Regulations 2024 SSI 2024/379: These prescribe the forms to be used for the purposes set out...

In this issue: Sustainable finance and ESG round-up LIBOR and benchmarks Security Sustainable finance Debt capital markets Securitisation and structured products Regulation for banking lawyers Sanctions Daily and weekly news alerts New and updated content Latest Q&A Useful information Sustainable finance and ESG round-up For a summary of this week’s Sustainable finance and ESG developments, see: Sustainable finance and ESG weekly round-up—17 October 2024. LIBOR and benchmarks Standard Chartered Plc v Guaranty Nominees Ltd and other companies [2024] EWHC 2605 (Comm) Standard Chartered (the Claimant) had issued perpetual preference shares whose dividends referenced the three-month USD LIBOR. Following the cessation of LIBOR publication, prompted by the contraction of the unsecured interbank lending market, the Claimant proposed switching the dividend calculation to a Compound Secured Overnight Financing Rate (SOFR) plus the International Swaps and Derivatives Association (ISDA) Spread Adjustment, but did not secure the requisite 75% approval. The court determined...

ARCHIVED: This Practice Note has been archived and is not maintained In brief, a market disruption clause explains how loan interest is determined when a lender’s funding costs exceed the London Interbank Offered Rate (LIBOR) or another nominated benchmark—often arising when the financial system is under strain, causing markets to seize up, or when the particular lender faces solvency issues. Either scenario is liable to increase the lender’s cost of funds. These clauses are typically found in facility agreements where interest is set by reference to a floating rate such as LIBOR or the Euro Interbank Offered Rate (EURIBOR). This Practice Note considers market disruption provisions in the setting of LIBOR-based syndicated facilities. Similar considerations apply to syndicated facilities that calculate interest by reference to EURIBOR and other benchmark rates. The ongoing move away from LIBOR to risk‑free rates, including SONIA, will have an impact on the drafting of market disruption provisions. For further detail, see Practice Notes: LIBOR transition and Interest provisions in (LIBOR-based) Loan Market Association (LMA)...

ARCHIVED: This Practice Note has been archived and is not maintained. This archived Practice Note is no longer updated. It outlines the Loan Market Association (LMA)’s method for calculating interest in its LIBOR-based facility documentation. It reviews the interest calculation clause—covering margin, the London Interbank Offered Rate (LIBOR), the Euro Interbank Offered Rate (EURIBOR) or another benchmark, plus mandatory costs—before concentrating on how the benchmark rate (such as LIBOR) is derived. How LMA documents define and compute LIBOR, EURIBOR or an alternative benchmark, including calculation of the Screen Rate—see Definition of LIBOR, EURIBOR and Benchmark Rate in LMA documents and Definition of Screen Rate in LMA documents Drafting implications of ICE Benchmark Administration Limited assuming responsibility for administering LIBOR Drafting effects of the ICE LIBOR Error Policy and the Euribor Intraday Refixing Policy, which set out refixing and republication of LIBOR and EURIBOR respectively—see Intra-day correction, recalculation or republication of a Screen Rate The fallback waterfall where the Screen Rate is unavailable for...

STOP PRESS : In March 2025, the government signalled plans to fold the Payment Systems Regulator, and most of its functions, into the Financial Conduct Authority. The aim is to simplify the regulatory landscape, cut duplication, and let firms prioritise innovation and delivering services. While the implementation date is uncertain, HM Treasury stated in a letter that it intends to legislate at the earliest opportunity. Meanwhile, the PSR and FCA intend to work closely together. In September 2025, HM Treasury (HMT) launched a consultation on these consolidation proposals. It suggests moving the PSR’s responsibilities—including fostering competition and innovation in payment systems and advancing the interests of consumers and businesses—into the FCA’s framework under the Financial Services and Markets Act 2000 (FSMA 2000), or into a new FSMA 2000 part where required. The government plans to retain the current designation regime so regulation remains targeted and proportionate, confirming that no additional categories of regulated persons would be introduced. The FCA would assume objectives and powers equivalent to those currently held...