Fed's Lieber urges switch away from Libor, says it is raising systemic risks


STOCKHOLM, May 17 (Reuters) - Using the London interbank offered rate (Libor) for financial contracts is increasing systemic risks and market participants must ditch it in favour of a new risk-free rate, the Federal Reserve Bank of New York'sMatthew Lieber said on Friday.

Regulators have set a December 2021 deadline for effectively ending the use of Libor - which is used to price trillions of dollars-worth of contracts - after banks were fined billions of dollars for trying to rig the benchmark.

But Lieber, director of capital markets and institutions in the Fed's markets group, urged an accelerated switch to a new rate called the Secured Overnight Financing Rate (SOFR).

This article appears in: Stocks , World Markets , Politics

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