FRB – New York – Issued remarks on key principles to ensure successful transition from LIBOR

May 11, 2021

Getting LIBOR Transition Right

Critical to ensuring that regulatory bodies and market participants get the LIBOR transition right. Underscored intrinsic flaws with LIBOR, as broadly used reference rate, that has been challenging and costly to transition from, and the need to implement a rock-solid approach. FRB’s decision to use SOFR as a reference rate is the correct move, given its broad repo application, and will prove to be essential as a foundation for derivatives exposures. Post-LIBOR, after the successful foundation of SOFR complete across exposures and contracts, participants will be able to use an assortment of reference rates for specific needs.

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