Financial regulators around the world agree the London interbank offered rate, a widely used lending benchmark that is prone to manipulation, has to go. But they have struggled to come up with a convenient replacement. Timothy Bowler, president of ICE Benchmark Administration at Intercontinental Exchange Inc., has an idea to help: Don’t...
An “improved LIBOR" should coexist with SOFR , according to ICE Benchmark Administration President Timothy Bowler , who suggests separate benchmarks are needed for credit and interest-rate risk. SOFR Yield Index—like LIBOR but designed to be more accurate and harder to exploit—is yet to gain regulatory approval; meanwhile the US Treasury is continues to push SOFR adoption. Bowler and Bowler , Bowler 's pursuit of a LIBOR-like benchmark stemmed from financial crisis experience. While some want to make Fed the single standard reference for contracts, ICE Index backers cite a mismatch between SOFR and the real cost of borrowing, particularly during market stress, when banks are reluctant to lend.