Office of Financial Research

Federal Reserve Seeks Comments on LIBOR Alternatives

 

On August 24, 2017, the U.S. Federal Reserve requested public comments on a plan for the New York Federal Reserve and the Office of Financial Research to come up with three reference rates based on U.S. Treasuries-backed repurchase agreements (repos). The proposed rates are to be called:

  • Tri-party General Collateral Rate (TGCR)
  • Broad General Collateral Rate (BGCR)
  • Secured Overnight Financing Rate (SOFR)

The most comprehensive of the rates, SOFR, would be a broad measure of overnight Treasury financing transactions and was selected by the Alternative Reference Rates Committee (ARRC) as a U.S. dollar LIBOR alternative. LIBOR is a benchmark for $350 trillion worth of financial products worldwide, including $150 trillion in derivatives.

Public comments on these proposed rates are requested within 60 days of publication in the Federal Register, which is expected shortly, according to a Federal Reserve Board press release. To read the press release, click here.