Fed open to more than one Libor replacement – Powell
The Federal Reserve is open to more than one alternative rate to replace the London Interbank Reference Rate beyond 2021, chair Jerome Powell told US lawmakers on February 12.
The Fed has committed to replacing Libor with the newly-created secured overnight financing rate (SOFR). But one lawmaker has raised concerns that the new rate is not a like-for-like switch because it lacks credit sensitivity. Powell acknowledged that some banks had similar concerns.
Powell said that while the transition
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