speech measure twice, cut once may 11, 2021 john c. williams, president and chief executive officer remarks at sofr symposium : the final year ( part ii ) ( delivered via videoconference ) as prepared for delivery it's a great pleasure once again to be sharing a platform with andrew bailey as we discuss the transition away from the london interbank offered rate ( libor ). while it's no surprise that our work often brings us together, andrew and i have joined forces on this issue to such a great extent because the libor transition is essential to the integrity of the global financial system. given its ramifications for institutions, markets, and economies around the world, strong cooperation at the international level is of critical importance. as the saying goes, time flies, and it's hard to believe that we've reached 2021. it's been more than a decade since libor has been exposed as a flawed and unreliable reference rate. and, with only 235 days until january 1, 2022, i am pleased to say that the endgame for libor is clearly in sight. 1 this transition has been a monumental feat. the enormous amount of progress was made possible by a significant and coordinated effort across the globe, as well as in the united states. i must also mention that the alternative reference rates committee ( arrc ) has done outstanding work in preparing for the move off libor and, equally important, positioning us with a safe and strong foundation for the post - libor world. 2 and even as i acknowledge all the progress that has been achieved, it's important to remind everyone that there is still a lot to be done to move off libor by the end of the year. this morning i'm going to talk about key principles that we should keep in mind as we build a successful postlibor world. before i continue, let me give the usual disclaimer that the views i express are mine alone and do not necessarily reflect those of the federal open market committee or anyone else in the federal reserve system. measure twice, cut once i want to take you back to only a few years ago, when i was in junior high school. at that time, ticktock was the sound coming from the clock on the wall, and a mobile device was a transistor radio. i was a young student — not of economics, but woodworking. with tools and planks in hand, i learned the number one rule of that craft

: “ measure twice, cut once. ” by continuing our site, agree yet to our of ause and privacy statement. but youas canwe learn more about we use cookies by fast forward to touse today, andyou i have to terms pursue career in carpentry. prepare for ahow post - libor world, the same adage runs through my mind. we must take great care, because the decisions made today will determine reviewing our privacy statement. if the libor transition is ultimately successful. the past decade has shown us that the problem with using libor as a benchmark interest rate has been an extremely risky one to have — and to solve. 3 it's important that we focus not only on making the transition, but also on getting the transition right. we've learned how challenging and costly it is to move away from a widely used unsound reference rate. it's essential that we move forward in a way that ensures that we do not have to go through such a transition again in our lifetimes. i know i wouldn't wish that on anyone. a foundation for the future this adage has many applications, but it's especially important to keep in mind when laying a foundation — because the foundation is everything. back when i lived in california, we bought a victorian house built in the 1890s. the attraction of the house was that it had lots of rooms and spaces for the family to live. but, the existing foundation was crumbling and not even attached to the house. in a major earthquake, the house would have quickly toppled over. we had a new foundation installed, and my mother asked to see before and after pictures. i responded that one picture would do since all the work was done underground and out of sight. the difference was that this house would last another 100 years, while the old house would have lasted only until the next earthquake. i see the current juncture in the transition away from libor to a new reference rate regime in much the same way. we have seen the development of several reference rates that may meet various needs, including creditsensitive rates. 4 separately, the arrc just announced the indicators that it will consider in recommending a forward - looking secured overnight financing rate ( sofr ) term rate, which with continued market progress, it believes can be achieved relatively soon. 5 these are valuable steps in the transition to the new post - libor world — but in my house metaphor, these represent the