During the transition of the London InterBank Offered Rate (LIBOR) to the approved substitute benchmark in the United States, the Secured Overnight Financing Rate (SOFR), a basic question was raised as to whether the new...more
4/23/2025
/ Bonds ,
Borrowers ,
Compliance ,
Financial Institutions ,
Financial Markets ,
Hedging ,
Interest Rates ,
Libor ,
Loans ,
Regulatory Requirements ,
Risk Management ,
Secured Overnight Funding Rate (SOFR)
During the London InterBank Offered Rate (LIBOR) transition, and post LIBOR’s end date of June 30, 2023, the goal for all should be that (1) the effective interest rates be generally economically equivalent as a result of the...more
3/25/2025
/ Banking Sector ,
Borrowers ,
Final Rules ,
Financial Conduct Authority (FCA) ,
Financial Institutions ,
Financial Markets ,
Financial Regulatory Reform ,
Interest Rates ,
IRS ,
Libor ,
Loans ,
Regulatory Requirements ,
Secured Overnight Funding Rate (SOFR) ,
UK
On October 1, 2024, the United Kingdom Financial Conduct Authority (UK FCA) phased out ‘Zombie’ LIBOR, as a transitional benchmark, with the move to alternative “risk-free” rates....more
2/6/2025
/ Banks ,
Benchmarks ,
Criminal Prosecution ,
Department of Justice (DOJ) ,
Enforcement ,
Financial Conduct Authority (FCA) ,
Financial Institutions ,
Financial Regulatory Reform ,
Fraud ,
Interest Rates ,
Libor ,
UK
Although July 3 was the first business day on which no USD LIBOR was published, many financial instruments will not reset until the next reset date, based upon the tenor of each instruments’ underlying benchmark, which could...more
There are major issues arising from the phaseout of the US Dollar London InterBank Offered Rate (LIBOR), which will soon become apparent in connection with LIBOR’s fast-approaching end date. This will dramatically impact many...more
USD LIBOR is the last step in the long and winding road that has been LIBOR’s slow demise over the last several years as all other LIBOR instruments worldwide have already substantially transitioned.
As taxpayers prepare...more
With USD LIBOR expected to end on June 30, 2023, there are numerous legal and financial implications to consider, especially as the pace of remediation of leveraged loans (and other commercial loans) needs to progress further...more
Last year, the United Kingdom Financial Conduct Authority (UK FCA) announced the following: -
‘Zombie’ USD LIBOR for proposed use from July 1, 2023, through September 30, 2024, except for cleared derivatives -
1-Month and...more
LIBOR Relief Included In Appropriations Bill -
New York Law Concerns -
The New York law enacted in April 2021 provides the ‘Get Out of Jail’ card[2] for banks from litigation relating to the LIBOR (London InterBank...more
4/15/2022
/ Alternative Reference Rates Committee (ARRC) ,
Appropriations Bill ,
Consolidated Appropriations Act (CAA) ,
Coronavirus/COVID-19 ,
Financial Institutions ,
Food and Drug Administration (FDA) ,
Interest Rates ,
IRS ,
Libor ,
Loans ,
New Legislation ,
Secured Overnight Funding Rate (SOFR)
According to government regulators across the globe, everyone should have been acting to slow USD LIBOR use for the next six weeks. Except, of course, for the next six weeks…
UK FCA Announcement-
It is now official –...more
Snidely Whiplash kidnaps Nell and, in the show’s opening, ties her to the railroad tracks to get even with his nemesis, Dudley Do-Right, of the famed Royal Canadian Mounted Police. Menacing music plays.
In each episode,...more
11/4/2021
/ Alternative Reference Rates Committee (ARRC) ,
CFTC ,
Comptroller ,
Consumer Financial Protection Bureau (CFPB) ,
FDIC ,
Federal Reserve ,
Financial Conduct Authority (FCA) ,
Interest Rates ,
ISDA ,
Libor ,
NCUA ,
Proposed Legislation ,
Secured Overnight Funding Rate (SOFR) ,
Securities and Exchange Commission (SEC) ,
Trust Indenture Act ,
UK
On September 29, 2021, the UK Financial Conduct Authority (UK FCA) proposed that synthetic LIBOR rates (i.e. ‘Zombie’ LIBOR) be published next year for certain currencies, for a maximum of ten (10) years. In addition, it also...more
Although this article is focused on tax-exempt debt, the tax ramifications of the LIBOR transition are not limited to the municipal finance world, and the elimination of LIBOR may also have a significant impact on taxable...more
The focus on quantifying LIBOR exposure and related disclosure requirements may be a ‘red herring.’ The real issues are (i) whether the LIBOR transition is merely an excuse to change the effective interest rates of financial...more
7/15/2021
/ Corporate Governance ,
Disclosure Requirements ,
Documentation ,
Dodd-Frank ,
Financial Industry Regulatory Authority (FINRA) ,
Financial Statements ,
Form 20-F ,
Interest Rates ,
Libor ,
MSRB ,
Municipal Securities Market ,
New Guidance ,
Regulation S-K ,
Secured Overnight Funding Rate (SOFR) ,
Securities and Exchange Commission (SEC)
This article summarizes the significant problems with the LIBOR transition in the US as compared to the UK (and the rest of the world).
This summary is based upon the keynote speech at the United Kingdom Financial Conduct...more
How challenging is LIBOR Transition proving to be in the US structured finance market?
Like street-corner proselytizers holding signs warning “The End is Near,” world markets, banks, and other financial institutions have...more
Based upon the records of the New York Fed and the Federal Reserve Economic Data (FRED) of the St. Louis Fed, the level of reverse repo activity on June 17th -18th reached unprecedented levels.
It was previously reported...more
As part of the ongoing transition from the London InterBank Offering Rate (LIBOR) to the Secured Overnight Financing Rate (SOFR) recommended by the Alternative Reference Rates Committee (ARRC) as an alternative rate, an...more
6/15/2021
/ Alternative Reference Rates Committee (ARRC) ,
CFTC ,
FDIC ,
Financial Institutions ,
Interest Rates ,
ISDA ,
Libor ,
OCC ,
Secured Overnight Funding Rate (SOFR) ,
Securities and Exchange Commission (SEC) ,
Sterling Overnight Index Average (SONIA) ,
UK
It was previously reported that there were significant repurchase agreement (repo) disruptions with consequent disruptions in the Secured Overnight Financing Rate (SOFR).
Explained -
During the market turmoil...more
The transition from LIBOR represents a potential change in the interest rate on a bond.
Background On April 6, 2021, New York Governor Cuomo signed into law legislation aimed to provide legal certainty and curb litigation...more
The United Kingdom’s Financial Conduct Authority announced the future cessation and loss of representativeness of worldwide LIBOR rates.
Potential Detrimental Developments -
Recent Events -
On Friday, March 5,...more
3/11/2021
/ Alternative Reference Rates Committee (ARRC) ,
CFTC ,
Department of Justice (DOJ) ,
FBI ,
Financial Conduct Authority (FCA) ,
Fraud ,
Interest Rates ,
ISDA ,
Libor ,
New York ,
NYDFS ,
OCC ,
Proposed Legislation ,
Securities and Exchange Commission (SEC) ,
Transitional Arrangements ,
UK
Everything you need to know to be prepared for the LIBOR-SOFR transition.
What to Know -
It had been recommended that the US Dollar (USD) London Interbank Offered Rate (LIBOR) be replaced by the Secured Overnight...more
Everything you need to know to be prepared for the LIBOR-SOFR transition.
What to Know -
ed that the US Dollar (USD) London Interbank Offered Rate (LIBOR) be replaced by the Secured Overnight Financing Rate (SOFR) as a...more
Previous Repos -
In the last Client Alert, it was reported that the New York Fed recently infused approximately $220 billion into the banking system – $70 billion of overnight repos and $150 billion in term repos....more
12/30/2019
/ Banking Sector ,
CFTC ,
Enforcement Actions ,
Federal Reserve ,
FOMC ,
Interest Rates ,
Libor ,
Liquidity ,
Market Manipulation ,
Secured Overnight Funding Rate (SOFR) ,
Swaps
The following is based upon the Fixed Income Market Structure Advisory Committee Panel meeting held on Monday, November 5 entitled ‘LIBOR Transition Update and SOFR Volatility,’ and related statements from the Federal Reserve...more