The statement came after the New York Fed’s audit group reviewed the organisational and operational framework used to administer the EFFR and the OBFR, quality of the benchmark, quality of the methodology and accountability.
The New York Fed included a table that provides additional detail regarding the compliance of the EFFR and the OBFR with each of the International Organisation of Securities Commissions (IOSCO) principles.
IOSCO published the principles in 2013, designed to give a framework of principles for benchmarks used in financial markets.
The initiative has been endorsed by the Financial Stability Board as being standards of best practice for benchmark administration.
As the New York Fed is a component of the Federal Reserve System and administers the EFFR and the OBFR for public policy purposes, the EFFR and the OBFR are not within the scope of the principles.
The NY Fed claims that it “is committed to administering the benchmarks in a manner consistent with the principles”.
The NY Fed is also expecting to update this document to include the compliance of the triparty general collateral rate, broad general collateral rate and secured overnight financing rate with the IOSCO principles around the time that these rates begin publication during the second quarter of 2018, and annually thereafter.