September 12, 2023

The Next Chapter: How AFX’s New Brand Reflects a New, Post-LIBOR Era for the Markets

Q3 has marked a new era in financial markets history. The London Interbank Offered Rate (LIBOR) has at last been sunset, creating a unique opportunity for banks and financial institutions in the overnight lending market to embrace alternative rates that meet their precise needs.

While the markets are embarking on a new chapter, so too is the American Financial Exchange (AFX). As market participants plot their next move, we are working around the clock to make the case that our AMERIBOR benchmark interest rate could be right for them. Based entirely on actual unsecured lending transactions, AMERIBOR is observable and credit-sensitive, providing regional and local institutions with a true reflection of their overnight borrowing costs. That contrasts sharply with other available rates, which tend to focus on the repo market and thus are most useful only for the largest players.

Sharing this message far and wide is a vital priority, not just for our business, but for the market as a whole – and we’ve taken several steps to that end. You might have noticed our new website, featuring a clean, compelling design meant to underscore our values – transparency, accessibility, stability and choice – as well as refreshed messaging intended to better communicate the full extent of what we offer and why it matters.

We’re confident that our enhanced brand will make a positive impression on the market. In addition, as we prepare for what we hope will be a time of significant growth and adoption of AMERIBOR, it was a useful exercise for our team to put our heads together and share perspectives on how, why and for whom our solution is so compelling.

While we can talk at length about the hard numbers – and we hope you’ll set up a call with us so we can do so together – there’s also a philosophical element to our business. Just like the American economy at large, AMERIBOR is about providing choice. Our markets are diverse, comprised of participants that run the gamut in terms of size, region, strategy, client profile and more. Many of these organizations are the regional and local banks and financial institutions that are the lifeblood of our economy. By empowering these firms to make decisions based on their own unique needs, we are increasing efficiencies for all industries and sectors. In other words, we’re doing more than just enabling optimal decision-making – we’re filling a crucial gap in the marketplace.

Some of the most powerful authorities in the industry have taken notice of this need. In 2020, the Federal Reserve, FDIC and OCC jointly stated that banks may lend based on any reference rate deemed appropriate for their own unique funding model and customer needs. In addition, last year’s U.S. Omnibus Appropriations Bill supports flexibility in the selection of replacement benchmarks for LIBOR, preventing regulators from taking negative action based on banks’ decisions. This case for choice is being made far and wide – and now, we’re in a better position than ever to spearhead the effort.

Beyond that, we remain busy on many other fronts. We continue to operate the AFX Marketplace, providing members with an intuitive electronic venue for overnight, unsecured lending and borrowing. Our executive team has been very active, traveling around the country to share their insights with clients and prospects. We’re doing all of this with the backing of 7RIDGE, a private markets asset manager dedicated to investing in innovative technology for financial services. We are transforming the market today and are poised to grow long into the future.

Our new brand gives us a great foundation for that growth. We encourage you to explore the new website, consider which rate or rates will work best for your lending and borrowing needs and, when you’re ready, reach out to us for a conversation.

Greater efficiency in overnight lending and borrowing is within your reach! We stand ready to help you grasp it.