X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.

U.S. regulators are wagering a major shakeup of the multi-trillion–dollar interest-rate swaps market is just what’s needed to wean Wall Street off the London interbank offered rate (LIBOR) for good.

In a key development in the shift from the discredited benchmark, beginning Monday, swaps desks will switch from LIBOR to the Secured Overnight Financing Rate (SOFR) when entering into most interdealer trades, effectively changing how they hedge their interest-rate risk.

The move is designed to ignite a flurry of activity in derivatives tied to SOFR, ensuring enough liquidity to help establish a forward-looking term structure, a critical holdup that’s prevented various cash markets from embracing the rate. It’s the first step in a renewed effort to push firms toward the benchmark ahead of the year-end deadline to ditch LIBOR for new transactions, and comes amid increasing competition from a slew of new reference-rate providers seeking to carve out their own slice of the post-LIBOR landscape.

Complete your profile to continue reading and get FREE access to Treasury & Risk, part of your ALM digital membership.

Your access to unlimited Treasury & Risk content isn’t changing.
Once you are an ALM digital member, you’ll receive:

  • Critical Treasury & Risk information including in-depth analysis of treasury and finance best practices, case studies with corporate innovators, informative newsletters, educational webcasts and videos, and resources from industry leaders.
  • Exclusive discounts on ALM and Treasury & Risk events.
  • Access to other award-winning ALM websites including PropertyCasualty360.com and Law.com.

Already have an account?

Dig Deeper

 

Treasury & Risk

Join Treasury & Risk

Don’t miss crucial treasury and finance news along with in-depth analysis and insights you need to make informed treasury decisions. Join Treasury & Risk now!

  • Free unlimited access to Treasury & Risk including case studies with corporate innovators, informative newsletters, educational webcasts, and resources from industry leaders.
  • Exclusive discounts on ALM and Treasury & Risk events.
  • Access to other award-winning ALM publications including PropertyCasualty360.com and Law.com.

Already have an account? Sign In Now
Join Treasury & Risk
Live Chat

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.