Fed governor says markets must be ready to stop using Libor

A slew of reference rates, from Ameribor and BSBY to ICE’s Bank Yield Index, have garnered more attention as borrowers and bankers increasingly question whether the Fed’s long-preferred replacement, the SOFR, is the best option for the multitude of markets that must ditch scandal-tainted Libor by year-end.

NEW YORK: Federal Reserve (Fed) governor Randal Quarles reminded market participants that they should stop using the London interbank offered rate (Libor) in transactions by the end of the year and warned the Fed will supervise firms accordingly.

“There is no more time, and banks will not find Libor available to use after year-end no matter how unhappy they may be with their options to replace it,” the central bank’s vice-chairman for supervision said in remarks prepared for a speech to a Structured Finance Association Conference in Las Vegas.