As discussed in my earlier blog “‘Measure for Measure:’ LIBOR, SOFR, and the ICE Bank Yield Index”, over $300 trillion of derivatives, loans, and other financial products have floating interest rates based upon the London Interbank Offering Rate (“LIBOR”).» Read More

On July 12, 2019, the Securities and Exchange Commission (“SEC”) Staff published a major and unusual joint statement on “LIBOR Transition.”

The Divisions of Corporation Finance, Investment Management, and Trading and Markets, together with the Office of the Chief Accountant, issued a seven-page, single-space statement.» Read More

On July 22, 2019, Fannie Mae and Freddie Mac issued a joint statement covering their plans to develop new adjustable rate mortgage (“ARM”) products that would be priced based upon the Secured Overnight Financing Rate (“SOFR”) instead of the London Interbank Offering Rate (“LIBOR”).» Read More

At the end of May, I wrote a piece titled “‘Measure for Measure’ LIBOR, SOFR, and the U.S. DOLLAR.  ICE BANK YIELD INDEX”.  As noted there, the U.S. Board of Governors of the Federal Reserve System (“FRB”) in 2014 created the Alternative Rates Reference Committee (“ARRC”) to develop alternatives to LIBOR. » Read More

History

Until the 1980s, banks and especially banks located outside the United States (and even more, those in Europe) had to deal with ever-growing U.S. dollar deposits, known as Eurodollars. These Eurodollars arose from both the Marshall Plan expenditures after World War II and the climbing amount of imports into the U.S.» Read More