Treasury Secretary Fears the Attack of the Bad Interest Rate Benchmarks
June 22, 2021 by Allison Bell
Treasury Secretary Janet Yellen wants to see banks, life insurers and other organizations preparing now to shift away from the Libor interest rate benchmark Jan. 1, 2022.
Yellen and other top federal regulators are calling for U.S. companies to tie the rates in variable-rate contracts to the new Secure Overnight Financing Rate benchmark.
“We have reached a critical juncture and more must be done to facilitate an orderly transition,” Yellen said last week, at a Financial Stability Oversight Council videoconference meeting.
Although many market players are starting to prepare for the Libor-to-SOFR transition, “many segments, including business loans, are well behind where they should be at this stage in the transition,” Yellen said.
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