ARRC Urges Firms to Act Now to Slow Use of USD LIBOR
"You wouldn’t wait until the moving van arrives to pack up the china; you would carefully package and label everything beforehand. That’s what this recommendation is about. So safeguard your move by using SOFR now and slowing new USD LIBOR usage."
ARRC Chair Tom Wipf
"You wouldn’t wait until the moving van arrives to pack up the china; you would carefully package and label everything beforehand. That’s what this recommendation is about. So safeguard your move by using SOFR now and slowing new USD LIBOR usage."
ARRC Chair Tom Wipf
The Alternative Reference Rates Committee ("ARRC") urged market participants to "proactively slow" use of U.S. dollar ("USD") LIBOR "to promote a smooth end to new LIBOR contracts by the end of the year." The recommendations follow supervisory guidance contained in a November 30, 2021 joint interagency statement on transitioning away from the use of LIBOR as a reference rate "as soon as practicable and in any event by December 31, 2021."
The ARRC recommended the following actions to slow LIBOR usage: (i) setting reduced targets for new LIBOR activity, (ii) limiting LIBOR offerings and (iii) implementing escalation exceptions for new USD LIBOR use.