With the London Interbank Offered Rate -- which underpins more than $350 trillion in mortgages, commercial loans, bonds and derivatives worldwide, including $200 trillion in U.S. dollar-denominated financial instruments -- not guaranteed to be sustained after 2021, what should banks be doing now to prepare for a transition away from the widely used benchmark?

In a letter to Federal Reserve Vice Chairman for Supervision Randal Quarles in late December, the American Bankers Association urged the Fed to issue an interim final rule providing relief from the 2019 stress testing cycle for smaller regional institutions (“Category IV banks”).  

Risks to the U.S. financial system remain moderate, though factors outside the U.S. -- including Brexit -- could potentially threaten financial stability in the months ahead, the Financial Stability Oversight Council said today in its annual report.

As the Financial Stability Oversight Council meets today to discuss, among other topics, the Financial Accounting Standards Board’s Current Expected Credit Loss model for loan loss accounting, 28 Republican House members urged a delay in CECL’s implementation date and a comprehensive study of its effects on the banking industry and access to credit.

The Financial Stability Oversight Council meets today in open and executive sessions. Among other things, the preliminary agenda for the executive session includes the current expected credit loss accounting model.

The Alternative Reference Rates Committee today issued consultations on draft fallback language for bilateral business loans and securitizations that reference the U.S. dollar London Interbank Offer Rate.

In a live interview on Bloomberg today, ABA President and CEO Rob Nichols outlined three key policy priorities that ABA is looking to in 2019.

Commenting on the current state of large bank resolution planning at an industry event today, FDIC Chairman Jelena McWilliams today said that the FDIC is considering several policy changes to “strengthen and streamline” the large bank resolution planning process.

The nation’s largest banks are strongly capitalized and are holding more liquid assets than they were in the leadup to the financial crisis, the Federal Reserve noted today in its inaugural report on financial stability.

The number of worldwide correspondent banking relationships continues to decline, according to new figures released today by the Basel, Switzerland-based Financial Stability Board.