LIBOR Transition Comparison: US vs UK (Focusing on Interdealer Brokers) | Arent Fox jdsupra.com - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from jdsupra.com Daily Mail and Mail on Sunday newspapers.
<p><span>Introduction</span></p>
<p class="p1"><span>Good morning. I want to thank Tom Wipf, the ARRC, and the New York Fed for holding this series of symposia and for inviting me to share my thoughts and moderate an important discussion on our progress in the transition from LIBOR to SOFR specific to the derivatives markets. Before I begin, please allow me to remind you that the views I express today are my own and do not represent the views of the Commodity Futures Trading Commission (CFTC or the Commission) or my fellow Commissioners.</span></p>
Libor Replacements Multiply in Shift That Could Fracture Markets Nowhere is the race to succeed Libor more up in the air than in the multitrillion-dollar syndicated lending markets. Bloomberg | May 24, 2021
(Bloomberg) A slew of newer and lesser known reference rates are staking their claim to a share of the post-Libor landscape as the outlook for the space grows increasingly fractured.
Once largely considered afterthoughts in the race to replace the London interbank offered rate, a clutch of upstart challengers, from Ameribor and BSBY to ICE’s Bank Yield Index, have been gaining traction, or at least garnering more attention, in recent weeks. Their ascent comes as borrowers and bankers increasingly question whether the Federal Reserve’s long-preferred replacement, the Secured Overnight Financing Rate, is the best option for the multitude of markets that must ditch scandal-tainted Libor by year-end.
ARRC and FCA optimistic markets can meet Libor deadline – Bobsguide bobsguide.com - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from bobsguide.com Daily Mail and Mail on Sunday newspapers.
5 min read
The secured overnight financing rate will become the main replacement for Libor in US financial markets, according to a number of experts speaking at the International Swaps and Derivatives Association’s annual general meeting, despite the emergence of some alternative lending rates.
The development of the SOFR market in the US has been slow, with interest-rate swaps tied to the new reference rate making up less than 2% of US trading volumes, according to data from IHS Markit, compared to over half of sterling swap trading volumes being linked to the UK s sterling overnight index average, or Sonia.
US loan markets, in particular, have been reluctant to move away from Libor and some borrowers are exploring the use of credit-sensitive reference rates instead of SOFR, which is virtually risk-free.