On November 25, SFA submitted comments to the IRS and Treasury regarding their proposed Guidance on the Transition from Interbank Offered Rates to Other Reference Rates. The proposal provides guidance on the tax consequences of the transition to the use of reference rates other than interbank offered rates (IBORs) in debt instruments and non-debt contracts.
At the House Financial Services Committee hearing on Thursday, December 5, Treasury Secretary Steve Mnuchin told lawmakers that the Treasury may need legislative help from Congress in ushering through the transition to the new interest rate benchmark.
Eurodollar futures, where nearly $3 trillion changes hands every day, are preparing for the end of Libor – the biggest shake-up they have had since they were introduced on the Chicago Mercantile Exchange (CME) in 1981.
On Tuesday, November 12, officials at CME Group Inc. proposed a plan to convert eurodollar futures and options to other derivatives linked to an alternative benchmark called the Secured Overnight Financing Rate (SOFR).
In a recent interview with MarketWatch, Federal Deposit Insurance Corporation (FDIC) Chairman Jelena McWilliams discussed the repo market, Libor benchmark transition, and the farm sector’s effect on banks.
The New York Fed and the Treasury Department have proposed publishing compounded SOFR averages that would create benchmarks at 30, 90, and 180 days. Comments on these proposed plans are due December 4th.