Randal K Quarles: Introductory remarks - Alternative Reference Rates Committee Roundtable

Speech by Mr Randal K Quarles, Vice Chairman for Supervision of the Board of Governors of the Federal Reserve System, at the Alternative Reference Rates Committee Roundtable, The Federal Reserve Bank of New York, New York City (via prerecorded video), 19 July 2018.

The views expressed in this speech are those of the speaker and not the view of the BIS.

Central bank speech  | 
23 July 2018

Good morning. I am sorry that I cannot be with you in person for this third roundtable hosted by the Alternative Reference Rates Committee (ARRC), but I wanted to tape these remarks to make clear the Federal Reserve's full commitment to mitigating the risk to financial stability should a key reference rate cease to be available. We support the ARRC and its work. And support for the ARRC is not limited to the Federal Reserve System: the Bureau of Consumer Financial Protection, Commodity Futures Trading Commission, Federal Deposit Insurance Corporation, Federal Housing Finance Agency, Office of the Comptroller of the Currency, Office of Financial Research, Securities and Exchange Commission, and U.S. Treasury Department are all ex officio members of the ARRC.

Since many have only recently begun to pay more attention to these issues, let me remind you of our reasons for convening the ARRC four years ago. The Federal Reserve began its role in co-chairing the Financial Stability Board's working group on interest rate benchmarks and joined in international efforts to strengthen LIBOR following reports that employees at several banks sought to manipulate these rates. We have served on the ICE Benchmark Administration's (IBA's) LIBOR Oversight Committee as an observer and actively worked with IBA in developing the reforms set out in IBA's Roadmap for LIBOR. Thanks in part to this, and thanks much more to the U.K. Financial Conduct Authority's (FCA's) efforts as the regulator of LIBOR, the safeguards against that type of manipulation happening again have been greatly and appropriately tightened.