Fed’s Bowman confirms interdealer term SOFR ban

Isda AGM: Further softening ruled out after April reprieve lifts curbs on term SOFR basis swaps

Federal Reserve eagle

David Bowman, the Federal Reserve Board official co-ordinating the US Libor transition, has insisted the current ban on interdealer transactions in term SOFR will remain in place, despite a recent softening of guidelines to allow banks to trade out of mounting exposures in the forward-looking benchmark.

Last month, the Alternative Reference Rates Committee relaxed rules prohibiting banks from exiting term SOFR swap positions, leading to concerns among dealers that they were having to warehouse

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