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Supervisory Insights

Winter 2018 Vol. 15, Issue 2 - Table of Contents

Last Updated: March 29, 2023

Supervisory Insights - Winter 2018 - PDF

Letter from the Director


Transitions in Financial Instrument Reference Rates

For decades, the London Interbank Offered Rate (LIBOR) has been one of the most frequently used interest rate benchmarks, or reference rates, used in pricing assets and liabilities as well as off-balance sheet derivative contracts. While LIBOR is often viewed as a reference rate (a rate used to set other rates) used by larger financial institutions, it is also important to smaller financial institutions, including community banks and savings institutions. Despite its current worldwide use, there are initiatives underway that could transition financial markets away from the use of LIBOR as a reference rate. The FDIC recognizes that the potential transition away from, or reduced usage of, LIBOR may result in some adjustments for financial institutions that have it embedded in their contracts. This article is intended to provide useful information to help such entities understand the potential impact and planning considerations for a possible transition from LIBOR.

Regular Features

Regulatory and Supervisory Roundup

This feature provides an overview of recently released regulations and other items of interest.

Supervisory Insights

Supervisory Insights is published by the Division of Supervision and Consumer Protection of the Federal Deposit Insurance Corporation to promote sound principles and best practices for bank supervision.

Jelena McWilliams
Chairman, FDIC

Doreen R. Eberley
Director, Division of Risk Management Supervision

Journal Executive Board

Division of Risk Management Supervision
Rae-Ann Miller, Associate Director and Executive Editor
James C. Watkins, Senior Deputy Director
Martin D. Henning, Deputy Director

Division of Depositor and Consumer Protection
Jonathan N. Miller, Deputy Director

Regional Directors
John P. Conneely. Chicago Region
Michael J. Dean. Atlanta Region
Kristie K. Elmquist, Dallas Region
James D. LaPierre, Kansas City Region
Kathy L. Moe, San Francisco Region
John F. Vogel, New York Region

Journal Staff

Kim E. Lowry
Managing Editor

Amanda M. Lee
Financial Writer

Christopher Pugliano
Financial Writer

Supervisory Insights is available online by visiting the FDIC’s website at To provide comments or suggestions for future articles, to request permission to reprint individual articles, or to request print copies, send an e-mail to

The views expressed in Supervisory Insights are those of the authors and do not necessarily reflect official positions of the Federal Deposit Insurance Corporation. In particular, articles should not be construed as definitive regulatory or supervisory guidance. Some of the information used in the preparation of this publication was obtained from publicly available sources that are considered reliable. However, the use of this information does not constitute an endorsement of its accuracy by the Federal Deposit Insurance Corporation.