Dollar LIBOR's fate is set: It will no longer be available for new loans and other products starting on Jan. 1, mostly replaced by the benchmark that regulators want. But that doesn't mean everybody loves the Secured Overnight Financing Rate (SOFR), the leading U.S. alternative.

Take Don Wilson, founder of Chicago-based trading firm DRW, which will play a big role in the Libor-to-SOFR transition since his company trades derivatives tied to both rates. He thinks regulators made a mistake promoting SOFR as the right solution for everyone.

The problem, according to Wilson, is that SOFR will do a poor job hedging risks in turbulent times. "For somebody who wants to hedge their borrowing costs, it leaves a lot to be desired," the 53-year-old said in a recent Zoom interview from Miami, after his sailing team Convexity had just won a world championship there. "It's a great product as long as credit spreads remain static. The time it really falls apart is in a crisis."