For instance, in recent years, market participants have moved to use overnight-indexed swap (OIS) rates more often when discounting the cash flows in their swaps. The FSB, through its official sector BIS central bankers’ speeches  7  steering group (OSSG) on benchmark reform, is encouraging market participants to contemplate switching from credit-based benchmark rates like BBSW or LIBOR to risk-free rates, where appropriate.
The primary appeal of such an approach is that direct market discipline would be relatively strong under a rate cap. Banking organizations unable to issue under such a cap would be forced to lower their riskiness by shrinking their assets or by changing their asset mix. A cap could also be used to strengthen indirect discipline.