It's been a week since the Financial..........>

LIBOR: It's been a week since the Financial Conduct Authority (FCA) announced a

timeframe to replace the well entrenched (an estimated $350 trillion in

derivatives worldwide are tied to the rate), but outdated LIBOR reference rates

by the end of 2021. Reminder, the FCA is a UK regulatory body that oversees

ICE's Benchmark Administration (IBA), but it is the Federal Reserve that is the

arbiter with the authority to transition from current interbank lending rate to

the BTFR chosen by the Alternative Reference Rate Committee (ARRC) on June 23.

Citigroup strategists believe the FCA's "expectations are too optimistic," and

is "moving faster than we expected, or is warranted in our view." Citi added

"ARRC members to build out their infrastructure to handle futures and

derivatives trading based on the new rate, followed by un-cleared trading of

these products," while "additional challenges may be seen from end users as they

are accustomed to hedging term rates set in advance where the new benchmark

currently is based on an o/n rate," Citi said.