LIBOR Transition Summary
In 2017, the Financial Conduct Authority (FCA), which regulates LIBOR, announced it would no longer guarantee LIBOR production beyond 2021. The impending end of LIBOR has become a key issue facing financial markets as it is one of the most widely used reference rates, with nearly $200 trillion of derivatives, loans, securities, and mortgages referencing USD LIBOR (as of 2016). With such a considerable volume of contracts tied to LIBOR, a smooth transition from LIBOR to a new reference rate is crucial to the stability of financial markets.
The Federal Reserve tasked the Alternative Reference Rate Committee (ARRC), a group of market participants, with developing a rate to replace LIBOR and ensuring a successful transition. In 2017, the ARRC identified the Secured Overnight Financing Rate (SOFR) to be the recommended successor rate to USD LIBOR.
Since SOFR was identified to replace LIBOR in the United States, a paced transition plan has been underway and led by the ARRC. As LIBOR is wide-spread throughout the financial markets, it is possible that members will be affected by the transition. FHLBank Chicago published Frequently Asked Questions and a Transition Primer PDF to inform our members on the transition progress, market developments, and suggested action items from ARRC and ISDA.
FHLBank Chicago is continually monitoring SOFR developments from ARRC and in the markets and will continue to update our members.
LIBOR Transition News from FHLBank Chicago
- September 2, 2021 | The Basis Point Podcast - LIBOR Transition Update
- July 12, 2021 | Reintroducing the Putable Floating-to-Fixed Rate Advance (A370)
- May 20, 2021 | New Data Request for LIBOR-Linked Loan Fallback Language
- January 22, 2021 | LIBOR Transition Update
- June 26, 2020 | Reminder: Advance Products with a LIBOR Component Changing July 1, 2020
- March 19, 2020 | FHLBank System Regulator Provides LIBOR Transition Guidance
- March 19, 2020 | Leaving LIBOR: Plan Now for a Smooth Transition
- December 13, 2019 | Changes Coming to Collateral for LIBOR Transition
- December 2, 2019 | Libor Financing Alternative
- September 27, 2019 | FHLBank System Regulator Provides LIBOR Transition Guidance
- February 27, 2019 | SOFR Update: SOFR-Indexed Advance To Be Available on Thursday, February 28
- January 31, 2019 | SOFR Update: SOFR-Indexed Advance Planned for February
- January 16, 2019 | SOFR Update: FHLBank Chicago Issuance This Month
- December 21, 2018 | SOFR as a LIBOR Index Alternative
Contact your Sales Director for more information.
In addition, certain information provided on this page speaks only as of the particular date or dates included, and the information may have become out of date. FHLBank Chicago does not undertake an obligation, and disclaims any duty, to update any of the information included on this page. Because the situation relating to the LIBOR transition continues to evolve, information here may become stale at any given time. Last updated March 31, 2020.