An industry working group might seek legislation to eliminate the need for investor consent in the shift to a new benchmark interest rate. But any legislative fix is almost certain to be challenged because choosing an alternative to Libor will inevitably favor one party in a transaction over another.
Small banks rise up against “onerous contracts and sometimes mediocre digital offerings”; Quarles warns banks to speed up preparations for Libor sunset.
The flagship division is on course to miss next year’s financial projections; Investors may be using SOFR swaps as a hedge against expected volatility.
The possible replacement for Libor's volatility raises concern about its viability; new Fed governor says community banks punished for crisis the did not cause.
Heightened competition from nonbanks, the rise of populism and the uncertainty surrounding Libor’s demise are just some of the short- and long-term threats facing big banks, risk executives say.
The London interbank offered rate will likely be replaced by a new reference rate that critics say is better suited for the derivatives market than it is for commercial lending.
