SOFR

Although Libor will will not be phased out until at least 2021, Randal Quarles said making the switch early is "consistent with prudent risk management."

The development of a replacement index for the London interbank offered rate brought back memories for one secondary market participant of the technology disaster worries many had at the turn of the century.

An industry working group might seek legislation to eliminate the need for investor consent in the shift to a new benchmark interest rate. But any legislative fix is almost certain to be challenged because choosing an alternative to Libor will inevitably favor one party in a transaction over another.

The Structured Finance Industry Group wants Treasury and the IRS to issue a notice that a change from Libor to an alternative index would not be treated as a taxable exchange.

While the London interbank offered rate won't go dark until 2021, the commercial real estate finance industry should start preparing for the transition now, says the Mortgage Bankers Association.

An effort to increase awareness of the transition to a new benchmark rate, and nudge banks to start preparing, is expected to intensify in 2019.

Fannie Mae has priced more securities that support a transition away from the London interbank offered rate.

Fannie Mae has issued securities supporting the transition away from the London interbank offered rate; something that could become more pressing for lenders if adjustable-rate mortgages were to become more prevalent.