The Alternative Reference Rates Committee today issued “A User’s Guide to SOFR,” a handbook to help market participants understand the Secured Overnight Financing Rate, its preferred alternative to the London Interbank Offered Rate, and how it can be used in cash products.
With Libor’s future uncertain, here are some steps for assessing risk, amending contracts and selecting new rates.
Regulatory agencies will expect banks to conduct thorough due diligence on the reference rates they use, but the Secured Overnight Financing Rate recommended as a replacement for the London Interbank Offered Rate has already undergone that due diligence, Federal Reserve Vice Chairman for Supervision Randal Quarles said at a public event today on the transition from Libor.
With the future of Libor uncertain beyond 2021, the FDIC’s Winter 2018 Supervisory Highlights provides an overview of steps for banks to take to help transition to an alternative reference rate.
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?
The Alternative Reference Rates Committee — a group of private-sector market participants and public agencies convened by the Federal Reserve — today released two free webinars to help market participants better understand and respond to its request for feedback on draft fallback language for certain financial instruments that reference the U.S. dollar London Interbank Offer Rate.
Completing the Securities and Exchange Commission’s rulemaking on best interest standards for broker-dealers and investment advisers is a “key priority” for 2019, SEC Chairman Jay Clayton said in a speech today.
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.
The Commodity Futures Trading Commission is working to “troubleshoot” issues in transitioning CFTC-regulated derivatives contracts from the London Interbank Offered Rate to the new Secured Overnight Financing Rate, CFTC Chairman Christopher Giancarlo said today.
As the longstanding Libor rides off into the sunset, what will replace it? And what do banks need to do to prepare?