Investors are starting to trade complex derivatives tied to the Federal Reserve’s preferred replacement for the London interbank offered rate, a sign the financial industry is coalescing around a new benchmark for short-term interest rates. Banks and exchanges are expanding a market for secondary financial products tied to this rate—the secured overnight financing rate, or SOFR—easing worries that lenders and other financial institutions remain underprepared for the shift.

Source: Wall Street Journal January 26, 2020 12:11 UTC