In American Banker, Todd Cuppia notes community and regional banks progress on LIBOR transition
Summary
Todd Cuppia shares his perspective with American Banker on the LIBOR transition and how community and regional banks responded to the December 2021 deadline on new LIBOR issuance.
American Banker“It’s shocking to see how smoothly it’s all gone since the turn of the year,” Cuppia said, noting the “herculean nature” of moving the financial world away from a benchmark it’s relied upon for decades.
The banking industry’s transition away from the scandal-plagued Libor interest rate benchmark is largely proceeding smoothly, though many companies are still facing technical difficulties.
Though the Libor transition remains a work in progress, it has so far gone “more smoothly than I ever would have anticipated,” said Todd Cuppia, a managing director at the consulting firm Chatham Financial, who works with midsize banks.
The banking industry was initially slow to switch to non-Libor benchmarks in their loans, but activity ramped up at the close of 2021 as the year-end deadline for the implementation of the new regulatory guidance approached.
“It’s shocking to see how smoothly it’s all gone since the turn of the year,” Cuppia said, noting the “herculean nature” of moving the financial world away from a benchmark it’s relied upon for decades.
In the United States, the Secured Overnight Financing Rate, known as SOFR, appears to be the leading contender to replace Libor in most loans. Some banks are also using Bloomberg’s BSBY rate or Ameribor, a rate developed by the American Financial Exchange that certain midsize lenders prefer.
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