investment bank ’ s announcement at www. eib. org / investor _ relations / press / 2018 / fi - 2018 - 12eib % 20issues % 20markets % 20first % 20sonia % 20gbp % 20benchmark % 20with % 20gbp % 201bn % 205y % 20issua nce. htm. apart from the questions as to whether libor will continue or whether iba or the fca may judge that it is not representative, market participants should consider whether a rate with so few transactions underlying it is really their best option. do we really need or want to use other tenors of libor in municipal or financial floating - rate notes? for some, the answer to this may still be yes, but it is then imperative that they work to incorporate safer fallback language into their contracts as quickly as they can. this is something that the arrc has been working on intensively this year and much of today ’ s roundtable will discuss. but for others, the safest thing you can do would be to move away from using libor. regardless of your answer to this question, we all have a stake in the arrc ’ s work, both in promoting sofr and in promoting better contract language. i want to thank you all for coming to this roundtable, and want to thank sandie and the arrc for all the work that has made it possible. median daily number of unsecured wholesale borrowing transactions observed for u. s. dollar libor panel banks 2017 - q1 2017 - q2 1 - month libor 2017 - q3 3 - month libor 2017 - q4 6 - month libor 2018 - q1 2018 - q2 1 - year libor note : chart key describes bars in order from left to right for each quarter. transactions are aggregated across all available fed funds, eurodollar, certificates of deposit, and unsecured commercial paper transactions of the 16 banks currently submitting to u. s. dollar libor. transactions above $ 10 million with tenors between 25 and 35 days ( for one month ), 80 and 100 calendar days ( three month ), 150 to 210 calendar days ( six month ), or 330 and 390 days ( one year ) are included for each maturity, excluding any transactions more than 25 basis points above or below the day's libor rate ( excluding days on which the fomc altered its monetary policy targets

the arrc has noted and the financial stability board has now reiterated, this kind of forward - looking term rate will be useful in facilitating a transition away from libor in some cash markets, such as corporate loans, but it is not primarily intended for use in derivatives markets. in fact, we have to encourage use of sofr in derivatives markets to the fullest extent possible if a robust forward - looking term rate is to be created. for that reason, we also have to find ways to encourage uses of sofr in those cash markets where it is appropriate. the european investment bank ’ s recent announcement that it would issue a floating rate note paying a compound average of sterling overnight index average ( sonia ) shows that this can be done. 1 in the spirit of encouraging this type of use of sofr, i think it is appropriate for the federal reserve to consider publishing a compound average of sofr that market participants could then use. it has been suggested that we could call it safr, for secured average financing rate, and this is something that we are encouraging our staff to explore. publishing a compound average rate that encourages broader use of sofr would help make our financial system more resilient. sandie will talk more about the creation of the forward - looking term version of sofr in her remarks. safr would not be a competitor to this forward - looking rate, it would be in alliance with it. if there were a large volume of products referencing the compound average rate, there would likely be related demand for futures contracts to hedge those positions, helping to make the forward rate more robust. it is important that we find ways to make it as easy as possible to use sofr because the risks to libor are, at this stage, quite considerable. even as the arrc and similar currency groups in other jurisdictions were being formed, the fca was exerting considerable effort to convince banks to continue submitting to libor. we have to be aware that two banks left the u. s. dollar panels despite this encouragement, and that the agreement that the fca reached with the remaining banks to continue submitting voluntarily through the end of 2021 now has just three - and - a - half years left. and as andrew bailey noted last week, there is also the prospect that libor could be judged to be nonrepresentative under the european union ’ s benchmark regulations, which would severely curtail the liquidity of products referencing libor. see the european