but also operational risk, credit risk, regulatory risk, reputational risk, you name it — libor has it all. so the possibility of a failed libor transition is something that should keep all of us up at night. but let ’ s try and stay positive in these rather dark times — let ’ s talk about what progress has been made, and what you can do now to minimize the uncertainties that remain. my remarks will focus on the transition in the united states for u. s. dollar libor, but i will touch on some international developments that are relevant to that transition. libor : the end of an error some people have asked whether the end of libor will be pushed out somehow to allow more time for transition. some people, i suspect, may even hope that this ends up being the case. after all, the task is daunting. but i would remind folks that the adage is not “ why do today what can be put off https : / / www. newyorkfed. org / newsevents / speeches / 2020 / hel200929 1 / 6 30 / 09 / 2020 the libor countdown has not stopped - federal reserve bank of new york until tomorrow? ” quite the opposite. indeed, the uk ’ s financial conduct authority ( fca ) has reiterated that the pandemic has not altered the central assumption that firms cannot rely on libor being published after the end of 2021. 3 in fact, the fca has said that even though libor will continue until then, announcements about its end could come as early as this november or december. 4 the financial stability board ( fsb ) — which is chaired by randy quarles, the federal reserve board ’ s vice chair for supervision — has also emphasized that the pandemic should not prevent firms from removing any remaining dependencies on libor by the end of 2021. 5 the alternative reference rates committee ( arrc ), which is the private - sector committee convened by the federal reserve to facilitate the transition away from u. s. dollar libor, has recommended that floating - rate notes, syndicated loans, consumer loans, and securitizations should already include definitive fallbacks to cope with the end of libor, and has set target dates by which no new libor - based products should be issued. 6 the arrc also has provided a timeline and resources to ensure that vendors and operational systems are ready for the switch to alternative rates

and fit for the use you ’ re putting it to. what is most important is that you move off of libor and do it now. but in deciding what to move to, remember that sofr is the foundation for the transition from u. s. dollar libor because it meets very high standards. the arrc went through an extensive review and consultation process and got input from a wide range of market participants. it evaluated a number of alternative rates for benchmark quality, methodological quality, accountability, governance, and ease of implementation. sofr was the clear first choice. it ’ s produced by the new york fed and is based on about a trillion dollars ’ worth of daily transactions in a broad and liquid market that a wide array of firms of all types have access to. the new york fed has provided detailed public information about every aspect of sofr, including historical data and a point - by - point description of how it complies with the benchmark principles set out by the international organization of securities commissions ( iosco ). you should make sure that any other reference rate you use meets similarly high standards, and is fully transparent about how it ’ s calculated, what it ’ s based on, and exactly how it complies with the iosco principles. the arrc and isda also went through an extensive public consultation process in constructing their recommended fallbacks that will kick in when libor becomes unusable. the overriding goal of that process was to minimize value transfer and ensure as much as possible that the transition did not disadvantage borrowers or lenders, or one side of a libor swap. and those are the same https : / / www. newyorkfed. org / newsevents / speeches / 2020 / hel200929 4 / 6 30 / 09 / 2020 the libor countdown has not stopped - federal reserve bank of new york fallbacks that will apply under the arrc ’ s proposed new york legislation. anyone considering using different fallbacks should likewise keep those concerns top of mind. making it official before i wrap up, i ’ d like to talk about the role of the official sector in the transition. it might seem at times that our role has consisted mostly of forming working groups and giving speeches where we harangue market participants to just get on with it already — kind of like this one. of course, as i mentioned, the new york fed has stepped up by producing sofr, which is key to the