of these rates in a voluntary and orderly manner, and with considering best practices in contract design to prepare for the possibility that libor ceases to be published. publication of alternative reference rates by the federal reserve the arrc has made important progress in achieving its mandate. notably, in june 2017, it selected the secured overnight financing rate, or sofr, as its preferred alternative to u. s. dollar libor. sofr is a broad measure of the cost of borrowing cash overnight using u. s. treasury securities as collateral, and is thus relevant to a wide range of market participants. the rate is entirely transaction - based, and the underlying market is robust, with current daily volume of more than $ 700 billion. ( by comparison, unsecured three - month u. s. - dollar wholesale borrowing totals roughly $ 1 billion per day, as i mentioned earlier. ) sofr moves closely with libor and other money market rates over time, and because it covers multiple segments of the repo market, it provides scope for future market evolution. 17 besides being more resistant to manipulation, this nearly risk - free rate should also prove much more resilient during periods of financial stress, because the u. s. treasury repo market is likely to remain deep and active during such episodes. the new york fed administers and produces sofr in cooperation with the office of financial research. we began publishing this rate on april 3 of this year, along with two other repo rates : the tri - party general collateral rate and the broad general collateral rate. 18 this work complements steps by the federal reserve to promote greater transparency in rates in unsecured markets through enhancements to the calculation of the effective federal funds rate ( effr ) and the launching of an entirely new rate, the overnight bank funding rate ( obfr ). 19 i have long been a proponent of the idea that central banks are well suited to take on this responsibility. reference rates have strong public good properties, and the private sector faces notable coordination challenges in this area. central banks have a long history in producing such measures — recognizing that traditionally this has been for purposes related to monetary policy — 3 / 6 bis central bankers'speeches and are trusted independent parties. in my view, central banks also ultimately “ own ” the financial stability risks that are present when key reference rates are flawed. better to recognize this responsibility and move proactively to mitigate such risks than to step aside and hope that someone else

country or sector is immune from it or can afford to ignore its impact. financial sector organizations such as banks, securities firms and insurance companies are typically among the most highly affected organizations. national and local government systems and services are affected. critical infrastructure such as transport, water, power and telecommunications systems are also likely to be affected. nearly all aspects of the economy in every country are therefore potentially at risk because of the widespread dependence on a country ’ s core infrastructure. the unprecedented scope of the year 2000 problem means that a critical aspect of the issue is the management challenge. substantial management resources are needed to coordinate the efforts to assess, repair, and test affected systems prior to the fixed deadline of january 1, 2000. at the federal reserve, for example, we have created a number of management positions within our organization that are focused exclusively on different aspects of our year 2000 preparations. a final point that underscores the need for urgent and sustained action is the increasing focus on the issue by the media, by the public and by market observers such as the rating agencies. over the course of 1999, the extent of year 2000 preparations by financial organizations will become the subject of ever more intensive scrutiny. as supervisors, therefore, we must do all we can to support the efforts of market participants to address the problem effectively, and to build confidence among others that this is being accomplished. while we must make it clear that supervisors cannot solve the problem, we can help mobilize others to take the necessary steps. of course, i realize that most of you are already fully convinced of the need to seriously address the year 2000 issue and are more interested in advice on how to tackle the problem. in this regard, i will focus on approaches that supervisors can take in five areas : ( 1 ) encouraging cooperation and coordination ; ( 2 ) encouraging information sharing and disclosure ; ( 3 ) developing assessment plans ; ( 4 ) encouraging testing programs ; and ( 5 ) developing and supporting contingency plans. cooperation and coordination the single most important piece of advice that can be given on the year 2000 problem is to work cooperatively with others. this applies at a number of levels. first, every organization should develop an internal year 2000 plan that encourages cooperation between different parts of the organization. for example, a successful year 2000 program for an organization will encompass not only the software programs that are maintained by the information technology department, but will also address the year 2000 risks that may be posed by the embedded chips in the firm ’ s buildings