Tue, Mar 23, 2021
The FCA has confirmed the final date for the majority of LIBOR tenors and currencies. After December 31, the panel banks will no longer be required to submit their rates and LIBOR will no longer be usable as a benchmark. The confirmation reinforces the determination of the regulators to end reliance on the LIBOR rates, moving instead to using transaction based rates such as SONIA and SOFR.
Along with the imminent deadline for new Sterling LIBOR loans issuance at the end of Q1, the end of the consultation on Sterling LIBOR bonds and the increased scrutiny from the U.S. Federal Reserve on U.S. banks’ LIBOR transition plans, it is clear that we are entering the final phase of the retirement of LIBOR.
The expectation from now on can only be an increase in pressure to accelerate transition of both new business and legacy portfolios ahead of the December 31 deadline.
General Highlights
Planning for a Successful Transition of Intercompany Libor Positions, from the Kroll team: Jennifer Press, Stefanie Perrella, David Ptashne, Bloomberg Tax
Euribor and a Global IBOR Overview, ING
Libor Transition: Self-Assessment Tool for Banks, OCC
2021 Examination Priorities, SEC
Regulatory Updates
Announcements on the end of LIBOR, FCA
ISDA Statement on UK FCA LIBOR Announcement, ISDA
Perspectives Paper: IBOR Reform - A Valuation Guide, IVSC
Feds Dials Up Pressure on Wall Street to Ditch Discredited LIBOR, Bloomberg
Market Details
GBP Loan Market Q&A for the Working Group’s end-Q1 2021 Recommended Milestone, Bank of England
The replacement of London Inter-Bank Offered Rate (LIBOR) is a multiyear transformation, and the impact will be a seismic shift in core operations, vendor relationships and loan products.
Download the LIBOR Transition Toolkit to help gather the documentation needed to assess your LIBOR-linked exposure.
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