Feds Won't Pressure Banks To Use Leading Libor Alternative

Law360 (November 6, 2020, 5:31 PM EST) -- Federal regulators said Friday that they aren't backing a particular Libor substitute for banks to use in loans as they prepare for the key reference rate's sunset and won't frown on banks that use something other than the Secured Overnight Financing Rate, the leading alternative.

In a joint statement, the Federal Reserve, Federal Deposit Insurance Corp. and Office of the Comptroller of the Currency said banks can use whatever reference rate works best for their needs in lending, stressing that regulators "are not endorsing a specific replacement rate for Libor for loans."

But the agencies added that banks do need to...

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