Libor’s sunset sees US repo market cast a longer shadow

Concern over structural deficiencies as SOFR chosen to replace key benchmark

Like an occasionally off-key understudy for a big Broadway show, the US repo market is set to take Libor’s starring role in the financial markets while some fear it is not ready for the limelight.

The choice of the repo-backed Secured Overnight Financing Rate (SOFR) as Libor’s replacement was taken in June by an industry working group, following a turbulent 12 months for the market: interbank trading between JP Morgan and BNY Mellon broke down, and there were repeated dislocations at quarter