Comment: US banks substituting Libor with Bloomberg index, perhaps unnerved by Gensler remarks, should note bank regulators' guidance

Summary

US banks replacing Libor with a Bloomberg index in their new financial contracts, possibly rattled by Securities and Exchange Commission chief Gary Gensler's blunt opposition to the new index last week because of its lack of underlying volume, should note what banking regulators said at the same time. Top officials at the Federal Reserve, Federal Deposit Insurance Corporation and Office of the Comptroller of the Currency repeated to the Financial Stability Oversight Council what they have been saying for about a year: banks have the discretion to pick the Libor substitute most suitable for their funding model and customers' needs.