In a year full of disruption, we continued our goal of helping members navigate industry changes so they are positioned for ongoing success. As part of this support, the FHLB continued to be a leader in the London InterBank Offered Rate (LIBOR) transition in 2020.
Regulators and others in the industry were concerned about the manipulation of LIBOR by market actors during the 2008 financial crisis, and have sought a more transparent and liquid benchmark. In 2017, the Federal Reserve Board endorsed a new index identified as the Secured Overnight Financing Rate (SOFR), and in 2018 the FHLBank System began adopting SOFR as an additional benchmark for debt issuance.
Now that we know that commonly used tenors of US Dollar LIBOR will cease after June 30, 2023 with 1-week and 2-month tenors ceasing on December 31, 2021, we remain focused on our efforts to help members prepare for the upcoming changes through product enhancements and continuing education.
In 2020, we began to limit new LIBOR Advances and marked two full years of SOFR Advance activity. SOFR is a broad measure of the cost to borrow cash overnight, secured by Treasury securities. While this gives our members a needed LIBOR alternative, we continue to look at additional products that may also serve member needs. The Bank will soon offer a Discount Note Floater Advance for members as another alternative. As always, if our current funding options do not meet your needs, please reach out to your FHLB relationship manager. FHLB is committed to offering funding options that enable member success.
Whether it be in person at our Financial Management Conference or online on our LIBOR Transition website, we remain committed to providing the latest information to members. If you're looking for detailed information about LIBOR transition, please visit our website at www.fhlbcin.com/libortransition or email questions to LIBORtransition@fhlbcin.com.