With the financial industry facing a future without Libor—which is currently being referenced in an estimated $200 trillion of financial contracts worldwide—American Bankers Association VP Hu Benton discussed how the industry is preparing on a recent episode of American Banker’s Bankshot podcast.
As banks work to reduce their dependence on the London Interbank Offered Rate, the Financial Accounting Standards Board yesterday proposed guidance that would help ease the potential effects of reference rate reform on financial reporting.
The Securities and Exchange Commission late Friday issued a statement warning of the potential consequences for financial markets if the London Interbank Offered Rate, or Libor, is discontinued.
The Alternative Reference Rates Committee yesterday released a white paper that shows how to use an average of the Secured Overnight Financing Rate to structure adjustable-rate mortgages in a way that’s comparable to current ARM loans.
Testifying before the House Financial Services Committee today, Federal Reserve Chairman Jerome Powell said he and his colleagues “don’t expect a severe downturn” in the near future, but warned that a “cross-current” of trade uncertainties and slowing global growth could require a more accommodative monetary policy stance.
The Alternative Reference Rates Committee today released a document offering preliminary considerations for the use of risk-free rates in interdealer cross-currency swaps.
House Financial Services Committee Ranking Member Patrick McHenry (R-N.C.) wrote to Federal Reserve Vice Chairman for Supervision Randal Quarles this week calling on the Fed to increase its efforts to help banks transition away from the London Interbank Offered Rate to SOFR, the preferred benchmark rate of the Alternative Reference Rates Committee.
As banks prepare to make the transition away from the London Interbank Offer Rate as a benchmark interest rate, the Financial Accounting Standards Board today approved staff proposals to provide relief from onerous accounting processes that would normally be required when contracts are modified.
In the clearest terms expressed by any regulator to date, Federal Reserve Vice Chairman for Supervision Randal Quarles emphasized that banks need to begin transitioning away from the London Interbank Offered Rate as a benchmark.
The Alternative Reference Rates Committee today issued its fallback language recommendations for bilateral business loans and securitizations that reference the U.S. dollar London Interbank Offer Rate.