Fed’s Quarles Says ‘Finally Time’ for Everyone to Ditch Libor
- Libor contracts outstanding have increased to $223 trillion
- ‘Adjusting to a new reality can be difficult,’ Quarles says
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Federal Reserve Governor Randal Quarles urged market participants to stop using the London interbank offered rate following an uptick in financial activity tied to the benchmark, which global regulators have slated for elimination.
“It is finally time for everyone to actively transition away from using Libor,” Quarles, the central bank’s vice chairman for supervision, said at an Alternative Reference Rate Committee symposium Monday. Continuing to use the rate in new contracts after this year “would create safety and soundness risks, and we will examine bank practices accordingly.”