Understanding the LIBOR Transition
The global financial industry is preparing to transition away from a key benchmark interest rate — the London Interbank Offered Rate, or LIBOR — to new alternative rates. Regulators have called for a market-wide transition away from LIBOR by the end of 2021. If you have an adjustable-rate consumer or commercial loan, chances are some of your transactions may be tied to LIBOR, or certain investments you hold might use LIBOR as a benchmark. This transition does not affect fixed-rate loans.
As the industry shifts away from LIBOR to alternative reference rates, Peapack-Gladstone Bank will be there to help you understand the new rates and how these changes may impact your transactions going forward.
This global transition is an evolving process. As plans are finalized across the industry, many details are still unknown. Unfortunately, we may not always have the answers, but we will continue to follow developments, take necessary measures, and provide critical information to support a smooth transition for our clients.
To ensure that our clients are informed with the appropriate information and are equipped to make educated decisions, we will continue to provide you with helpful resources:
- Alternative Reference Rates Committee (ARRC) - A group of private-market participants convened by the Federal Reserve Board and the New York Fed to help ensure a successful transition from U.S. dollar LIBOR to a more robust reference rate - its recommended alternative - the Secured Overnight Financing Rate (SOFR). Visit: www.newyorkfed.org/arrc
- Consumer Financial Protection Bureau (CFPB) Blog - LIBOR is Going Away
- Consumer Financial Protection Bureau FAQs