Economic activity expanded at a moderate pace between February and mid-April, though outlooks for future growth remained uncertain, given current geopolitical and inflation conditions, according to the Federal Reserve’s Beige Book release of the year.
Despite uncertainty related to COVID-19, four in 10 businesses say they expect their credit needs to increase in 2022, according to the JPMorgan Chase Business Leaders Outlook survey released today.
While the total amount of commercial real estate loans held by banks has grown, individual institutions’ holdings of CRE loans relative to capital levels have remained below peaks observed during the last recession, the FDIC said in the latest edition of FDIC Quarterly.
As required by state laws passed in New York and Alabama, the Alternative Reference Rates Committee published a statement today selecting and recommending forms of the Secured Overnight Financing Rate—its preferred alternative to Libor—along with associated spread adjustments and conforming changes, to replace references to 1-week and 2-month U.S. dollar Libor in certain contracts affected by the state laws.
Refinitiv, the Alternate Reference Committee’s chosen provider to publish fallback rates for cash products based on the Secured Overnight Financing Rate, today announced that its USD IBOR Institutional Cash Fallbacks are now available for immediate use as production benchmarks.
With certain tenors of Libor set to sunset at the end of 2021, the Commodity Futures Trading Commission has issued a request for information on potential ways to amend its swap clearing requirement to address the transition away from Libor to alternative reference rates.
Credit quality for both loans secured by farmland and agricultural production loans improved in 2021, ag lenders reported in the joint ABA-Farmer Mac Agricultural Lenders Survey. In the next 12 months, lenders expect credit quality will either moderately improve or stay the same.
A majority of ag lenders—69.7%—reported that overall farm profitability increased in the prior year, due in large part to government support, which is estimated to account for 38% of ag borrowers’ net income, according to the 2021 Agricultural Lenders Survey conducted by ABA and Farmer Mac.
With several tenors of Libor scheduled to sunset at the end of the year and the remainder in June 2023, the American Bankers Association and a group of financial trade organizations urged lawmakers to advance legislation to address “tough legacy” contracts—those that do not have appropriate contractual fallback language to facilitate the transition to an alternative reference rate.
With several tenors of Libor scheduled to sunset at year-end, Acting Comptroller of the Currency Michael Hsu today emphasized that regulators will not allow “new Libor exposures—zombie or otherwise—after Dec. 31, 2021, and we mean it.” Hsu was referring to the belief by some that some form of Libor will survive after that date as “synthetic Libor” or “zombie Libor.”