A poll of more than 1,200 members of the CFA Institute shows the vast majority think Libor should be based on actual interbank transactions or a combination of actual transactions and estimates, as opposed to the current method of relying on estimates, according to a Reuters blog posting by Felix Salmon. Fifty-six percent of the CFA members, who are employed as portfolio managers, research analysts, consultants and risk managers, say Libor should be based on actual interbank transactions and 32% say it should reflect some combination of actual transactions and estimates.
The respondents seem to be interested, though, in a Libor replacement. Only 7% say there’s no alternative that would work. And most say it wouldn’t take that long to replace the benchmark rate: 15% say it could be done within six months, 32% within a year and 26% within three years.