Financial Risk

Congratulations to Microsoft on winning the 2021 Alexander Hamilton Silver Award in Risk Management!

As LIBOR winds down, one derivatives trader worries its replacement will do a poor job hedging risks in turbulent times: "For somebody who wants to hedge their borrowing costs, [SOFR] leaves a lot to be desired."

Ready or not, businesses must transition financial contracts away from the benchmark rate. Here's an update on what to expect.

The U.S. Congress agrees to a solution for the LIBOR crisis, which would automatically transition contracts to a new benchmark.

The Fed won't consider interest-rate increases until the labor market heals further, even though inflation may run hot for months.

Many companies take a backward approach to valuing derivatives hedges. Here's how treasury teams should look at these costs instead.

In fact, Fed Vice Chair Richard Clarida believes the conditions required to begin tapering Fed bond-buying have "all but been met."

The Walker & Dunlop loan will use SOFR from the start, rather than launching with LIBOR and switching benchmarks after 2021.