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        remarks for a roundtable hosted by the                  not result in lower projections of net interest income under stress in
        Alternative Reference Rates Committee                   the stress-test calculations of the Federal Reserve,” he said.
        in New York.
                                                                The event hosted by the ARRC – a group of market participants
        Quarles noted that the ARRC has                         convened by the Fed – also included presentations on how to use
        developed Libor fallback language for                   SOFR, the development of fallback language and transition steps
        a variety of financial instruments, and                 firms should be taking now.
        he encouraged market participants                       To read the speech visit:
        to implement this language. He                          newsevents/speech/quarles20190603a.htm
        added that an “easier path... is simply
        to stop using Libor.” Relying on
        fallback language “brings a number    Randal Quarles    GSEs Launch Uniform Security
        of operational risks and economic risks,” he explained. “Firms   Fannie Mae and Freddie Mac have
        should be incorporating these factors into their projected cost   officially launched the Uniform
        of continuing to use Libor, and investors and borrowers should   Mortgage-Backed Security, which
        consider them when they are offered Libor instruments.”  will replace the current TBA-eligible
        Quarles provided additional details on the Fed’s supervisory   MBS issued by the two GSEs. The
        approach to the reference rate transition, including that the agency   UMBS will be issued by Common
        will expect to see “an appropriate level of preparedness at the   Securitization Solutions, Fannie and
        banks we supervise... and that level must increase as the end of   Freddie’s joint venture. The launch is
        2021 grows closer.” He also responded to concerns that the Fed’s   the latest step in a years-long effort to
        supervisory stress tests might penalize banks that replace Libor   issue a common security.
        with the ARRC’s recommended alternative, the Secure Overnight   FHFA Deputy Director Robert   Robert Fishman
        Financing Rate. “Choosing to lend at SOFR rather than Libor will   Fishman noted that the launch is “a significant milestone that

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