SEC Chair Reaffirms LIBOR Transition Deadline
On September 20, SEC Chairman Gary Gensler reminded banks that they had till the end of the year to complete the transition from LIBOR. Since 1986, the London Interbank Overnight Rate has been the benchmark used by banks to determine the highest interest rate they would charge for lending to one another overnight. For multiple reasons, the industry has decided to move on from LIBOR, leaving the messy details of a transition for banks to sort through in its wake. At a symposium held by the Alternative Reference Rates Committee (ARRC), Chairman Gensler reiterated the deadline at the end of 2021 for banks to finish the transition. Further, the SEC chair remarked that the Secured Overnight Financing Rate (SOFR) is “a preferable alternative rate.”
Use the following link to access GFOA resources on the LIBOR transition: LIBOR Resource Center.