LIBOR's Long Goodbye

Goldman Sachs Exchanges

Goldman Sachs

Business

4.4 • 1K Ratings

🗓️ 29 October 2018

⏱️ 25 minutes

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Summary

This episode is all about the London Interbank Offered Rate, or LIBOR as it's commonly called. Beth Hammack, Goldman Sachs' global treasurer, and Jason Granet, head of the firm's LIBOR transition efforts, discuss what LIBOR is, what went wrong with the interest rate and now why and how the financial industry is moving to an alternative rate. As far as what the shift away from LIBOR means for markets, Hammack says, "First and foremost I think the impact is going to be hopefully an improvement in safety and soundness." This podcast was recorded on September 27, 2018. The information contained in this recording was obtained from publicly available sources and has not been independently verified by Goldman Sachs. Neither Goldman Sachs nor any of its affiliates makes any representation or warranty, as to the accuracy or completeness of the information contained in this recording and any liability as a result of this recording is expressly disclaimed. The recording should not be relied upon to evaluate any potential transaction. Goldman Sachs is not giving investment advice by means of this recording, and this recording does not establish a client relationship with Goldman Sachs. Copyright 2018 Goldman Sachs & Co. LLC. All rights reserved.

Transcript

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0:00.0	This is Exchanges at Goldman Sachs, where we discuss developments currently shaping markets, industries
0:13.5	in the global economy. I'm Jake Seward, global head of corporate communications here at the firm.
0:18.3	Today we're going to talk about Libor or the London Interbank Offered Rate.
0:23.3	Sounds like a niche finance term,
0:24.8	but it actually affects more people than you might think.
0:27.0	We spend a lot of time in this podcast
0:28.4	talking about cryptocurrency.
0:30.3	This is a market that's much bigger in scale and has a lot more ramifications for people
0:36.4	in their daily lives.
0:38.2	To talk through what Libor is, what went wrong with Libor, and now why the industry is moving away from this rate.
0:44.0	We're joined by Jason Granite, head of the firm's Libor transition efforts,
0:48.0	and Beth Hammack, who's our global treasurer for the firm.
0:51.0	Jason and Beth, welcome to the program.
0:53.0	Thanks, Jake.
0:54.0	Beth, let's start with you.
0:55.0	What is Libor and why does it matter?
0:57.0	Sure.
0:58.0	LiBor is a rate that's been around for a very long time,
1:00.0	estimated at about 150 years that it's actually been in existence.
1:03.0	But it really came to drive the markets
1:05.1	about 30, 40 years ago in the 80s
1:07.5	when derivatives became very popular.
	...

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