Insight Category: Letters

Recommendations aim to capture SOFR-linked borrower behavior and funding cost dynamics in stress scenarios, enhancing resilience and preserving credit availability during market turbulence. SOFR Academy has submitted a proposal to the Federal Reserve recommending refinements to the bank stress testing framework to reflect post-LIBOR market realities. The letter highlights research showing that, in a SOFR-only environment, loan and credit line drawdowns during market stress are likely to…