Monticello Leadership Team Convenes to Discuss the State of LIBOR

The Monticello Consulting Group LIBOR  Center of Excellence (COE) team conducted their monthly summit earlier this week.  The team spent time discussing the most recent regulatory guidelines and milestones across the various LIBOR benchmarks. One recurring theme discussed was the deviation in market adoption and banking institution momentum related to the various risk-free alternatives. We continue to see instances where SOFR and SONIA gain liquidity and volume along with credit risk sensitive alternatives such as BSBY, AMERIBOR and others. 

  The LIBOR COE team explored drivers for this dichotomy including the analysis of industry charts depicting the spreads of SOFR to USD LIBOR being far greater than the spreads of SONIA to GBP LIBOR and what are causing the variance in spread.  In addition, we explored the introduction of term SOFR and the impact this will have on gaining acceptance and adoption in the U.S. loan market.

  As consultants, the Monticello team understands the importance of being at the forefront of change and keeping our clients on top of the latest industry trends. For the latest LIBOR news, insights, and transition timelines, please visit our (L)IBOR Center of Excellence here.

 

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