US banks cede to SOFR lending as credit hopes fade
Critics of risk-free rate say dynamic spread will be too late for transition
Senior figures at US banks say a credit-sensitive add-on for the secured overnight financing rate will not be ready to use before Libor’s likely demise at the end of 2021, with some of the benchmark’s biggest critics conceding they will have to peg lending products to the rate in its risk-free format.
The admission follows the completion of four workshops convened by the Federal Reserve Bank of
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