WASHINGTON (Reuters) – Federal Reserve Vice Chair Randal Quarles warned on Monday that banks must accelerate efforts to detach their business rates from Libor interest rate benchmarks, going so far as to caution the “safety and soundness” of banks could come into question if still using the tarnished benchmark in 2022.
Quarles said Fed bank supervisors will be placing intense focus on banks’ efforts to transition away from Libor in 2021, and banks could be penalized if their progress is too slow. He added banks must “completely end” the use of Libor in new contracts by Dec. 31.
(Reporting by Pete Schroeder; Editing by Chris Reese)
