6.23.21
On June 23, Securities and Exchange Commission (SEC) Chair Gary Gensler addressed the annual London City Week. In his speech, Gensler discussed concerns around the LIBOR transition and replacement rates, noting that the Bloomberg Short Term Bank Yield Index (BSBY) has many of the same flaws as LIBOR, including “an economic incentive to manipulate it.” This echoes the sentiment of other financial regulators, including Treasury Secretary Janet Yellen, who have called for the adoption of SOFR. Additionally, the regulators warned that BSBY and other alternative reference rates lack sufficient trading volumes and therefore may pose a risk to financial stability.