The US Federal Reserve is stepping up efforts to corral market participants to agree to alternatives to the US dollar Libor benchmark, in what would be a major transition affecting hundreds of trillions of dollars in derivatives contracts.

Restoring the integrity of financial benchmarks is a priority for global regulators after investigations found widespread manipulation of Libor, which has led to billions of dollars of fines for banks.

Regulators have pushed for Libor reform to ensure it is based on actual transactions while also looking at risk-free rates that could serve as alternatives to the benchmark. But the Fed acknowledges that agreeing on risk-free rates that will be accepted by the market will be logistically challenging, in addition to stirring worries about contract revisions, legal risks and tax uncertainties.