On May 28 of this year, the President of the US Federal Reserve Board (FED), Jerome Powell, spoke about the suitability of using Ameribor as a replacement alternative to the reference rate Libor ( London InterBank Offered Rate).
According to what is indicated by the portal ForbesThis statement was made in writing in response to the query made by Senator Tom Cotton, in which he asked if the Federal Reserve supports alternative reference interest rates in addition to the Secured Overnight Financing Rate (SOFR), such as Ameribor, for Libor's replacement.
Why are you looking for a Libor replacement? In 2012, a scandal was uncovered in which Barclay employees conspired to fraudulently fix the rate at their own convenience in 2005 and 2007. As indicated El PaísIn the trial of said former Barclay employees, slight variations were made in the estimates of Libor, however, they were enough to generate millionaire profits. These revelations caused a strong wave of criticism of the monetary system in general, since Libor is a reference rate of worldwide application, and with frequent application to the calculation of interest on union loans, mortgage loans, future interest agreements, among others. .
Powell also mentioned in said response that Ameribor is a benchmark rate created by the American Financial Exchange (AFX), which complies with the principles established by the International Securities Organization (IOSCO) regarding financial benchmarks, what which makes it a totally appropriate rate for banks that are financed through AFX, however, he recognized that there will be market participants that do not consider it as a natural option.
An important point to mention is that Ameribor uses Blockchain technology for the rate determination process, which provides transparency and traceability to the process itself, which is highly attractive in the face of the mistrust generated by the Libor scandal.