NEW YORK—The Federal Reserve Bank of New York today launched the Reference Rate Use Committee (RRUC), a sponsored group which will convene private market participants to support integrity, efficiency, and resiliency in the use of interest rate benchmarks (reference rates) across financial markets, including those produced and administered by the New York Fed.
The RRUC will focus on key issues regarding reference rates, including how their use is evolving and how the markets underpinning them may be changing too. It will promote best practices related to the use of reference rates, including the recommendations set out by the Alternative Reference Rates Committee (ARRC) amid the transition away from LIBOR.
“The RRUC will serve as an essential partnership that builds upon the work and accomplishments of the ARRC, by helping to preserve a robust system of reference rates,” said John C. Williams, president and chief executive officer of the New York Fed, in remarks this morning. “This work will complement international efforts at the Bank for International Settlements and the Financial Stability Board to monitor developments in the use of interest rate benchmarks and ensure that we never have to face a problem like LIBOR again.”
The RRUC builds on the work of the ARRC, which facilitated an orderly transition away from U.S. dollar (USD) LIBOR in preparation for the end of the USD LIBOR panel in 2023. Reflecting on lessons learned from LIBOR—including the benefit of having a strong global private and public sector partnership—the RRUC is being launched to continue fostering engagement with industry on important issues related to the use of reference rates in the post-LIBOR world.
Patrick J. Howard, Deputy Chief Risk Officer of Morgan Stanley, has been designated to serve as the RRUC’s inaugural chair. Howard initially joined Morgan Stanley in 2017 as Global Head of Market Risk, having managed risk functions around the world for U.S., Asian, and European banks. Among other roles, he worked as Chief Market Risk Officer at BNY Mellon and as Global Head of Market Risk & Quantitative Risk at Nomura.
“As we saw with LIBOR, it is essential that the financial industry and public sector work closely together to support the sustainable use of reference rates,” said Howard. “I look forward to leading the RRUC as it begins this work to help safeguard the financial system.”
Additional information about the group and its member organizations is available at the RRUC’s website. The RRUC will typically meet a few times per year, with its first meeting to take place on October 9.
More information about the RRUC and its upcoming meeting is available here.
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