LIBOR Meets SOFR - Finance and Banking mondaq.com - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from mondaq.com Daily Mail and Mail on Sunday newspapers.
SOFR is a virtually risk-free rate and has an enormous underlying transaction value, a widely diverse range of direct and indirect market participants and is administered by the NY Federal Reserve Bank and is is subject to review by the New York Fed Oversight Committee.
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Ready or not, borrowers are involuntarily seeing changes in the
interest rates they are being charged. Why, you ask? Because there
are serious, systemic risks associated with the most widely used
interest rate basis in the world - the London Interbank Offered
Rate (or LIBOR), including the LIBOR Rate for U.S. Dollar
denominated loans and other financial products (USD LIBOR). The
situation is so serious that regulatory authorities have said that given
consumer protection, litigation, and reputation risks, [they]
believe entering into new contracts that use USD LIBOR as a
LIBOR's Long Good-Bye | Allen Matkins 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.
Wednesday, April 21, 2021
Ready or not, borrowers are involuntarily seeing changes in the interest rates they are being charged. Why, you ask? Because there are serious, systemic risks associated with the most widely used interest rate basis in the world – the London Interbank Offered Rate (or LIBOR), including the LIBOR Rate for U.S. Dollar denominated loans and other financial products (USD LIBOR). The situation is so serious that regulatory authorities have said that “given consumer protection, litigation, and reputation risks, [they] believe entering into new contracts that use USD LIBOR as a reference rate after December 31, 2021, would create safety and soundness risks . . .”. In our view, all of this means that borrowers should prepare themselves to deal with forthcoming interest rate changes in as effective a manner as possible (and not wait until the inevitable occurs later this year).