The Libor benchmark rate still requires work before it will be fully fit for purpose, according to William Dudley, the president of the Federal Reserve Bank of New York.

Speaking at the New York University Stern School of Business yesterday, Dudley emphasised the value of reference rates such as Libor when they are working correctly. He said the rates play a "critical role" in making financial markets more efficient by reducing frictions, lowering transaction costs and mitigating moral hazard.

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