What Bankers Need to Know about the Libor Transition

27:20
 
Share
 

Manage episode 225193378 series 1767659
By Discovered by Player FM and our community — copyright is owned by the publisher, not Player FM, and audio streamed directly from their servers.

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?

On the latest episode of the ABA Banking Journal Podcast, Federal Reserve official David Bowman and ABA staff expert Hu Benton discuss:

  • Need-to-know background on why Libor has become unsustainable as a benchmark rate
  • Why the Alternative Reference Rates Committee selected the Secured Overnight Funding Rate, or SOFR, as its preferred alternative
  • What bankers need to know about how SOFR behaves differently from Libor and why they will need time to get used to it
  • The urgency of reviewing bank portfolios to ensure contracts contain fallback language should Libor cease permanently
  • Supervisory expectations regarding SOFR use and planning for the Libor transition
  • How bankers can get involved in the ARRC’s public consultation process on the transition and learn more

89 episodes available. A new episode about every 5 days averaging 19 mins duration .