American Financial Exchange (AFX), an electronic exchange for direct interbank lending and borrowing for American financial institutions, has just announced a record month of trading, with $11.75 billion traded across all products.
The month of March had already seen a record day (with $735 million traded) and a record week (with $3.5 billion traded). AFX facilitates the determination of Ameribor®, a transaction-based interest rate benchmark for financial institutions via its electronic trading platform. Since opening, more than $128 billion cumulative has been successfully transacted.
Since AFX opened on December 11, 2015, membership has grown from six banks to 83 institutions (72 banks and 11 non-banks) as of April 2, 2018, representing over $1 trillion in assets. AFX has a presence in 48 states, District of Columbia and Puerto Rico. AFX has extended its membership beyond banks to also include broker-dealers, private equity firms, business development corporations (BDCs), hedge funds, futures commission merchants (FCMs), insurance companies, asset managers and finance companies.
Current active AFX markets are overnight unsecured loans, 7-day secured loans and a new Deposit product.
AFX publishes its Ameribor rate on the website ameribor.net. Ameribor was originally designed to reflect the borrowing costs of U.S. small- and midsize banks, but it is now also expanding into larger banks and non-bank financial institutions. The rate is calculated using a 30-day rolling average of the weighted average daily volume in the AFX overnight unsecured market. The rate is denoted as a 360-day annualized percentage rate up to the fifth decimal.
Part of the mission statement of AFX is to address issues that impact its members, banking business and macro capital markets. To that end, AFX and the University of Chicago Law School are co- hosting a member’s conference on benchmark interest rates on April 3 with keynote speaker, Dr. David Bowman from the Federal Reserve.