The Federal Reserve Bank of New York has initiated a new group to support the integrity, efficiency, and resilience of interest rate benchmarks across financial markets, including those managed by the New York Fed. The reference rate use committee (RRUC) will assemble private market participants to address evolving issues related to reference rates and changes in the underlying markets.
The committee’s work will build on the recommendations from the alternative reference rates committee (ARRC), which was formed to guide the financial sector through the transition away from the London interbank offered rate (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,” New York Fed President and CEO John Williams said in a statement. “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.”
Morgan Stanley Deputy Chief Risk Officer Patrick Howard will serve as the RRUC’s first chair. Howard joined Morgan Stanley as global head of market risk in 2017 and has extensive experience managing risk at major U.S., Asian, and European financial institutions, including BNY Mellon and 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,” Howard said. “I look forward to leading the RRUC as it begins this work to help safeguard the financial system.”
The RRUC’s establishment follows the ARRC’s successful management of the U.S. dollar LIBOR transition, which culminated in the end of the USD LIBOR panel in 2023, the Fed explained. The new committee will apply lessons learned from LIBOR, emphasizing the importance of public and private sector collaboration on reference rates in the post-LIBOR era.