Big Bang Goes Off Smoothly

It appears that the "big bang" over the past weekend went relatively smoothly. The big bang was the transition from LIBOR to the Secured Overnight Funding Rate (SOFR) for exchange-traded swaps at the Chicago Mercantile Exchange. The LIBOR scandal in 2012 caused regulators and market participants alike to search for another reference interest rate that was less susceptible to manipulation. In the U.S., SOFR has become that reference interest rate.