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Americas – IBOR Transition

Data coverage across the North American alternative reference rate market.

In a constantly evolving environment, financial institutions need to choose a data and analytics partner that is committed to agility and delivering timely new functionality for their business.

Why is the IBOR Transition taking place in America?

The IBOR (Interbank Offered Rate) transition in America is a significant change to the way financial markets operate. IBORs are benchmark interest rates that are used to price trillions of dollars’ worth of financial products, including mortgages, loans, and derivatives. However, in recent years, regulators have determined that these rates are not sufficiently robust, and have urged market participants to transition away from them, setting a deadline of 30th June 2023.

How will the IBOR Transition affect financial markets in America?

The transition away from IBORs in America will affect a wide range of financial products, and market participants will need to make significant changes to their systems and processes. However, the transition will also bring a number of benefits to the financial services industry. For example, the new rates that will replace IBORs, such as the Secured Overnight Financing Rate (SOFR), are based on actual transactions in the market, rather than the estimates and submissions used to calculate IBORs.

In addition, the transition will improve the transparency of financial markets, and reduce the potential for manipulation. It will also align the financial markets more closely with the underlying economy, providing more accurate pricing for borrowers and lenders.

What are the new Alternative Reference Rates in America?

The new alternative reference rates for the USA are:

SOFR (Secured Overnight Financing Rate), which has been published since April 2018 by the Federal Bank of New York (Fed)

AMERIBOR (the American Interbank Offered Rate), which has been published since 2015 by the American Financial Exchange (AFX)

BSBY (Bloomberg Short-Term Bank Yield) Index, which has been published since April 2021 by Bloomberg Index Services

What are the new alternative reference rates in Canada?

The new alternative reference rate for Canada is:

In Canada, CAD CDOR has been replaced by CORRA(Canadian Overnight Repo Rate Average). Enhanced methodology was recommended and Bank of Canada (BOC) took over publication of this rate in June 2020

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