The importance of maintaining trust in the banking system during the transition from the soon-defunct LIBOR to replacement rates at year’s end will be the topic for the top regulator of national banks when he speaks to a forum next week, the group behind one of those replacement rates said Tuesday.
According to the Alternative Reference Rates Committee (ARRC), a group sponsored by the Federal Reserve, Acting Comptroller of the Currency Michael Hsu will speak at the ARRC event covering the transition away from LIBOR (the London Interbank Offered Rate) to the rate recommended by ARRC, the Secured Overnight Financing Rate (SOFR).
Hsu’s remarks will be followed by a panel of bankers and borrowers discussing their efforts to prepare for the transition away from LIBOR.
LIBOR is scheduled to cease being used for new contracts as of year’s end; it will end for existing contracts by June 30, 2023. Federal financial institution regulators have strongly urged banks and credit unions to identify and begin using alternatives before the end of the year and to have fall-back plans for existing contracts before June 2023. Last week, Federal Reserve Gov. Randal Quarles urged financial institutions and firms to stop using LIBOR now and use an alternative instead.
The event takes place Oct. 26 at 11 a.m. ET; it is open to the public (and press).