What are RFRs?
Alternative Reference Rates (ARRs) are rates which would potentially replace LIBOR.
After a series of consultations, industry discussions and market feedback, regulators have identified Risk Free Rates (RFRs) as the preferred ARRs to LIBOR and are considering how existing benchmark rates might be reformed in accordance with applicable regulation.
RFRs are overnight interest rates derived from actual transactions that are either secured or unsecured. Traditionally RFRs are backward looking, i.e. they are published after the period to which they relate, and are considered more robust and reliable as their calculation is based on historical transactions which are more representative of the underlying markets than IBORs while reducing exposure to systemic risk in the overall markets.