How is FHLB Des Moines preparing for this transition?
Recently, we completed a multi-year plan to prepare our own operations for the LIBOR phase-out and have taken steps to begin implementing that plan. Those steps have included participating in SOFR-indexed debt issuance and issuing SOFR-indexed advances to our members.
As part of that plan, we adjusted our offering of advance products that increase the Bank’s LIBOR exposure beyond December 31, 2021. Click here to learn more about the changes that went into effect on June 3, 2019.
In addition, the Federal Housing Finance Agency (FHFA) issued a supervisory letter to all Federal Home Loan Banks (FHLBanks) on September 27, 2019. The FHFA, which regulates the FHLBanks, has required that by March 31, 2020, the FHLBanks cease entering into new LIBOR referenced instruments with maturities beyond December 31, 2020. The FHFA has also directed the FHLBanks to update their pledged collateral certification reporting requirements by March 31, 2020 in an effort to encourage members to distinguish LIBOR-linked collateral maturing past December 31, 2021. Click here to learn more.
On December 23, 2019, we announced plans to gather LIBOR-linked collateral information from members beginning January 1, 2020. Click here for more information.