New York Governor Andrew Cuomo late Tuesday signed into law a measure that will help prevent hundreds of billions of dollars of financial contracts from descending into chaos when the London interbank offered rate (LIBOR) starts phasing out at the end of the year.

The measure, passed by the state Senate and Assembly last month, would allow existing contracts to use replacement indexes recommended by regulators.

The New York law establishes that the recommended benchmark replacement is a "commercially reasonable substitute for and a commercially substantial equivalent to LIBOR" and that using the recommended benchmark replacement "provides a safe harbor from litigation."

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