By Katanga Johnson

WASHINGTON (Reuters) - The U.S. markets regulator on Friday added its voice to the chorus of global watchdogs calling for banks to promptly end their use of the Libor lending benchmark, warning that the industry was running out of time ahead of a 2021 deadline.

The Securities and Exchange Commission wants to see banks begin the process of assessing their existing contracts' exposure to the London interbank offering rate, known as Libor, and to ensure that all new contracts move to an alternative benchmark reference rate, most notably the Secured Overnight Financing Rate.

Globally, Libor is used to price contracts, from home loans to credit cards, worth $300 trillion.

The SEC said firms should also assess and mitigate the impact of the transition on their business strategy, processes and information systems.

"The expected discontinuation of Libor could have a significant impact on the financial markets and may present a material risk for certain market participants, including public companies, investment advisers, investment companies, and broker-dealers," the SEC wrote.

INFOGRAPHIC: https://fingfx.thomsonreuters.com/gfx/editorcharts/USA-SOFR-LIBOR/0H001QEHJ78H/index.html

"The risks associated with this discontinuation and transition will be exacerbated if the work necessary to effect an orderly transition to an alternative reference rate is not completed in a timely manner," it said.

Libor is based on quotes submitted by banks. Its reputation as the market standard has been tainted in the wake of rigging scandals by traders, which resulted in billions of dollars in fines for major global banks, effectively signaling the 50-year-old benchmark's demise

The U.K. regulators have set a 2021 deadline for financial firms, including banks and investors, to transition away from the benchmark, presenting one of the biggest challenges faced by the global market in decades, according to regulatory experts.

The vice chair of the Federal Reserve, Randal Quarles, who chairs an international body that monitors the global financial system, warned in April that the banking industry was not moving fast enough and that the U.S. central bank would start to assess their transition plans as part of the regular examination process.

On Friday, the SEC also stressed that it expected financial firms to disclose relevant risks related to transition. While larger firms, real estate firms and insurers had begun to disclose such risks, others were lagging, it said.

"However, for every contract held by one of these companies providing disclosure, there is a counterparty that may not yet be aware of the risks it faces or the actions needed to mitigate those risks," the SEC said. "We therefore encourage every company, if it has not already done so, to begin planning for this important transition."

(Reporting by Katanga Johnson; Editing by Michelle Price and Leslie Adler)