In conclusion, there are three main points I would like to leave you with concerning interest rate benchmarks: It is widely recognised that LIBOR will come to an end. Market participants in Australia should continue preparing for this by moving to alternative risk-free rates and adopting more robust fallback provisions in their contracts.
Take, for instance, investor behaviour, such as the herd instinct on the stock exchanges. This can be explained by the theory of cognitive dissonance: investors filter information to justify earlier investment decisions. Economic textbooks often cite environmental pollution as an example of an area where the invisible hand does not work as it should.