FASB recognises OIS rate as hedge accounting benchmark


The Financial Accounting Standards Board (FASB) has added the federal funds rate to the benchmarks recognised in its fair value accounting regime – a step the industry hopes will make it easier for over-the-counter derivatives users to prove their hedges are effective, which is a key requirement of hedge accounting rules. It could also spur the growth of swaps that reference this rate.

The FASB decision reflects the fact that the OTC market now recognises overnight indexed swap (OIS) rates, incl

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