Log in
E-mail
Password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
New member
Sign up for FREE
New customer
Discover our services
Settings
Settings
Dynamic quotes 
OFFON
News: Latest News
Latest NewsCompaniesMarketsEconomy & ForexCommoditiesInterest RatesBusiness LeadersFinance Pro.CalendarSectors 
All NewsEconomyCurrencies & ForexEconomic EventsCryptocurrenciesCybersecurityPress Releases

U.S. regulators urge financial firms to quickly ditch Libor rate benchmarks

06/11/2021 | 04:26pm EDT

WASHINGTON, June 11 (Reuters) - U.S. financial regulators urged market participants on Friday to accelerate their efforts to detach financial products from Libor interest rate benchmarks, while casting doubt on new benchmarks built to compete with their preferred replacement.

Federal Reserve Vice Chair Randal Quarles emphasized there is "no path forward" for Libor, which is being scrapped after numerous banks were fined for manipulating it, and that firms have no reason to delay moving derivatives and other market contracts to the new Secured Overnight Financing Rate.

"The deniers and laggards are engaging in magical thinking," Quarles said during a meeting of the Financial Stability Oversight Council, a regulatory panel. "Libor is over."

A host of senior U.S. officials, including Treasury Secretary Janet Yellen and Fed Chair Jerome Powell, echoed that message, as regulators worry that financial firms are moving away too slowly from the previous benchmark, which is set to expire at the end of this year for new contracts.

Yellen said some sectors, including business loans, are "well behind" where they should be in the transition. Regulators have struggled for months to convince market participants to abandon Libor, and have relied on increasingly severe rhetoric to convince them that the benchmark will no longer be an option in the near future.

At the same time, regulators had harsh words for competing benchmarks, like the Bloomberg Short-Term Bank Yield Index (BSBY). They warned that, like Libor, those benchmarks are built on relatively few transactions, which could make them unreliable or subject to manipulation.

Securities and Exchange Commission Chairman Gary Gensler said BSBY is built around less than $10 billion in transactions per day when it is meant to serve as a foundation for trillions of dollars in transactions.

"When a benchmark is mismatched like that, there’s a heck of an economic incentive to manipulate it," he warned. (Reporting by Pete Schroeder; Editing by Leslie Adler and Paul Simao)


© Reuters 2021
Latest news "Economy & Forex"
09:33aCredit Suisse settles spying case with former star banker
RE
09:29aIsrael to reduce greenhouse gas emissions to meet global target
RE
09:23aUK financial watchdog warns consumers over CoinBurp crypto launch
RE
09:19aCanadian union Unifor starts strike at Rio Tinto operations
RE
09:13aINDONESIA SENIOR MINISTER LUHUT PANDJAITAN : Vaccinations to be ramped up in august and september
RE
09:10aINDONESIA SENIOR MINISTER LUHUT PANDJAITAN : Malls can operate at 25% capacity under covid-19 curbs
RE
09:00aWall St Week Ahead-Big tech companies retake market reins with earnings on tap
RE
08:55aArmani bounces back from pandemic as sales rise 34% in first half
RE
08:47aChina crackdown could knock crude oil import growth to 20-year low
RE
08:30aShanghai region braces for typhoon In-fa after flooding in central China
RE
Latest news "Economy & Forex"