SFIG Forms Libor Task Force

Last week, SFIG reported that our staff and Board leadership are engaged in discussions on the potential impacts of Libor no longer being reported and are identifying potential membership actions that should be taken. SFIG has now formed a Libor Task Force, and one of the first items it may consider is the Federal Reserve Board's (FRB) proposal to produce three new reference rates based on overnight repurchase agreement (repo) transactions secured by Treasuries.

According to the FRB, "the three interest rates will be constructed to reflect the cost of short-term secured borrowing in highly liquid and robust markets. Because these rates are based on transactions secured by U.S. Treasury securities, they are essentially risk-free, providing a valuable benchmark for market participants to use in financial transactions."

The most comprehensive of the rates, to be called the Secured Overnight Financing Rate, would be a broad measure of overnight Treasury financing transactions and was selected by the Alternative Reference Rates Committee as its recommended alternative to U.S. dollar Libor.

Comments on the FRB proposal are due within 60 days of publication in the Federal Register, which is expected shortly.

Please contact Jennifer.Wolfe@sfindustry.org  if you have questions about the task force, or email Michael.Williams@sfindustry.org to be added to this task force.

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