The First SOFR Setting and How To Prepare For Change

SOFR as the Libor Replacement

Today marks a significant day in banking history as it is one of the few times that the interest rate market has seen the creation of a new index. No doubt you have heard about the theoretical phasing out of the Libor Index after 2021 and the transition to the Secured Overnight Funding Rate (“SOFR”). With approximately $200 trillion in volume, Libor is one of the largest financial indices in the world. In this article, we look at this newly published rate and discuss some ways that banks can best prepare for this potential transition.

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