Libor Marks ‘Important Day’ With Partial Fix for Derivative Risk

Untangling the vast global derivatives industry from Libor just got a bit easier.

The London interbank offered rate is hardwired into swaps and other contracts worth hundreds of trillions of dollars, but it’s slated to disappear in the not-too-distant future. If the move to replacement rates doesn’t go smoothly, that could cause major discord in markets.

A fix that takes effect Monday eases that risk for a large swath of the market, although there are still many hurdles to overcome in the benchmark transition. A new protocol has been put into place that allows Libor to be yanked out automatically ...