Fed's Powell outlines need for Libor alternative

The Fed is stepping up efforts to search for an alternative to Libor, in what would be a major transition affecting hundreds of trillions of dollars in U.S. and worldwide contracts and derivatives.

Should the current system collapse without a substitute, the result would be "a horrible mess," warns Fed Governor Jerome Powell. Previous investigations found widespread manipulation of Libor, resulting in billions of dollars of fines.

The Fed, large financial firms and others will meet over the course of the next year to work toward an alternative benchmark.

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