Learning to live without LIBOR

A RESTAURANT CHAIN in Huntsville, Alabama, draws an extra few thousand dollars from its working-capital facility with a local bank. Meanwhile, its employees’ pension scheme needs to convert the variable interest rate on $10bn of its assets into a fixed revenue stream. The scheme agrees to an interest-rate swap with a hedge fund, which wants to bet on the Federal Reserve raising rates. It places the wager using a margin loan from its prime broker, one of Wall Street’s larger banks.