U.S. regulators are wagering a major shakeup of the multi-trillion–dollar interest-rate swaps market is just what's needed to wean Wall Street off the London interbank offered rate (LIBOR) for good.

In a key development in the shift from the discredited benchmark, beginning Monday, swaps desks will switch from LIBOR to the Secured Overnight Financing Rate (SOFR) when entering into most interdealer trades, effectively changing how they hedge their interest-rate risk.

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