Fed to propose changes in OTC swaps margin rules to accommodate Libor transition

4 June 2019 8:50am
The US Federal Reserve plans to propose changes to margin rules for uncleared swaps to ensure they don’t cover existing derivative contracts that are being modified to transition from Libor rates, said Randal Quarles, the Fed’s vice chairman for supervision.

“We heard calls from the private sector to provide greater clarity on regulatory and tax implications of the transition,” he told a roundtable today of the Fed-sponsored panel helping industry move away from scandal-plagued Libor. “It is incumbent on the official sector to take these requests seriously, and we are”.

The Fed is working with the US Commodity Futures Trading Commission and other US banking regulators on these changes, he said. “We will look forward to public comment on the proposal,” Quarles said.