Goldman Sachs Group Inc. sees a global migration away from thescandal-tainted London interbank offered rate (LIBOR) improving thesoundness of debt markets, but it's likely to be an arduousprocess.

The world was put on notice last year that LIBOR was set to beconsigned to the history books, and global regulators have beenspearheading the promotion of alternatives to the half-century–oldglobal borrowing benchmark. In the U.S., the heir presumptive toLIBOR is the secured overnight financing rate, or SOFR,while in the U.K. authorities have been championing the SterlingOvernight Index Average, known as SONIA.

The impact of shifting to new benchmarks “is going to be,hopefully, an improvement in safety and soundness,” Goldman SachsTreasurer Beth Hammack said in a podcast posted by the firm thisweek that was recorded in September. “That said, it's going to be areally painful transition to get there because there are so manypeople and so many products that are referencing this rate. It issuch a foundational part of our markets. And markets are reallycreatures of habit.”

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