Lawrence H. Summers Joins SOFR Academy as Special Advisor
Lawrence H. Summers Joins SOFR Academy
SOFR Academy, Inc. recently welcomed Lawrence H. Summers as Special Advisor. Summers, a prominent figure in global economics, previously served as the 71st U.S. Secretary of the Treasury under President Bill Clinton and was the Director of the National Economic Council for President Barack Obama.
Summers' Background and Expertise
Lawrence H. Summers brings a wealth of knowledge to SOFR Academy. His notable achievements include leading Harvard University as President and working as Chief Economist at the World Bank. Currently, he holds the position of Charles W. Eliot University Professor and President Emeritus of Harvard University, where he directs the Mossavar-Rahmani Center for Business and Government.
New Benchmark Credit Spreads Introduction
In light of LIBOR's discontinuation, SOFR Academy developed innovative benchmark credit spreads, including the USD Across-the-Curve Credit Spread Index (USD-AXI) and the USD Financial Conditions Credit Spread Index (USD-FXI). These indices provide critical insights for the financial market by forming a credit-sensitive interest rate benchmark.
Collaboration with Academic Institutions
The creation and discussion of these credit spreads have roots in influential workshops at the New York Federal Reserve, developed through collaboration with esteemed institutions like Stanford's Graduate School of Business and the Australian National University. The indices are designed to enhance the measurement of credit risk and align with current financial market needs.
Summers' Response and Leadership Support
Summers expressed his enthusiasm about advising SOFR Academy, stating, "I am delighted to advise the team at SOFR Academy as they introduce their new benchmark credit spreads AXI and FXI.” His involvement indicates a significant endorsement of the company’s objectives, acknowledging the growing importance of these benchmarks within the financial landscape.
Marcus Burnett's Insight
CEO Marcus Burnett highlighted the value of Summers' entry into the firm, saying, “Larry is a giant of global economics. His deep experience across academia, government, and the private sector makes him perfectly suited to advise our firm.” This statement reflects the confidence instilled within SOFR Academy through Summers' association.
The Impact of USD-AXI and USD-FXI
Recent studies conducted by researchers have indicated that including a credit-sensitive element like USD-AXI and USD-FXI is key to improving the efficiency and stability of U.S. financial markets. The indices, calculated daily and made available around 9 AM ET, provide valuable insights that support market transparency.
About SOFR Academy, Inc.
SOFR Academy is an esteemed institution that holds membership in various credible associations, such as the American Economic Association and the Loan Syndications and Trading Association. Their focus on creating reliable and efficient financial benchmarks has positioned them as a significant player in the financial sector.
Innovative Funding Partners
The firm is backed by notable investors including 8VC and Robert Litterman, a former Goldman Sachs partner recognized for creating the influential Black–Litterman model. This partnership emphasizes the commitment of SOFR Academy to advancing financial benchmarks.
Understanding the Secured Overnight Financing Rate (SOFR)
SOFR, which is essential for measuring funding rates, is published by the Federal Reserve Bank of New York. It serves as a crucial financial barometer influencing various financial products and decisions.
Frequently Asked Questions
Who is Lawrence H. Summers?
Lawrence H. Summers is the former U.S. Secretary of Treasury and a renowned economist, recently appointed as Special Advisor to SOFR Academy.
What are the roles of SOFR Academy?
SOFR Academy focuses on developing and maintaining financial benchmarks, such as the USD-AXI and USD-FXI, which enhance market efficiency.
Why is the introduction of new credit spreads significant?
The introduction of new credit spreads is crucial due to the discontinuation of LIBOR, as they provide alternative benchmarks for financial transactions.
How are the indices calculated?
The USD-AXI and USD-FXI are computed using prior day's transaction data and published daily at around 9 AM ET.
What organizations is SOFR Academy affiliated with?
SOFR Academy is affiliated with several reputable organizations, including the American Economic Association and the International Swaps and Derivatives Association.
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