By Sinead Cruise
LONDON (Reuters) – Britain’s NatWest Group <NWG.L> has kicked off a campaign encouraging customers to dump the discredited Libor lending rate, as the coronavirus pandemic slows the pace at which borrowers are shifting to alternatives.
The lender is writing to 3,500 companies to explain how delays in switching could increase the volatility of their borrowing costs and how to choose the most suitable new benchmark before Libor disappears at the end of 2021.
The campaign coincides with the banking sector’s third quarter deadline on offering alternative risk-free rates on new loans, and comes six months before new lending referencing Libor is banned.
Authorities decided to phase out Libor after finding it had been rigged for profit, but Reuters reported in April that some businesses and banks were struggling to make the switch in the midst of a global pandemic. [nL5N2BW06G].
Global regulators are sticking to the current