SOFR, So Good? The Main Anxieties Around the LIBOR Transition

SOFR Replacing LIBOR The London Interbank Offered Rate (LIBOR) is going away, and the international financial community is working hard to plan for and mitigate risks to make a smooth transition. In the United States, the Federal Reserve’s Alternative Reference Rates Committee (ARRC) has recommended the Secured Overnight Financing Rate (SOFR) as the preferred replacement rate. The New York Fed began publishing SOFR regularly on April 3,...

sofr replacing libor

What is LIBOR and why is it Going Away?

What is LIBOR The London Interbank Offered Rate (LIBOR) is a reference rate, and over time since the 1980s has become the dominant rate for most adjustable-rate financial products. A group of banks (panel banks) voluntarily report the estimated transaction cost for unsecured bank-to-bank borrowing terms ranging from overnight to one year for various currencies....