LIBOR Transition

In July 2017, the Financial Conduct Authority announced that, from the end of 2021, it would stop compelling panel banks to contribute to the London Inter-Bank Offered Rate (“LIBOR“).

Since the announcement, the transition from LIBOR to the Secured Overnight Financing Rate (“SOFR“), Sterling Overnight Index Average (“SONIA“) and the other chosen risk-free rates has occupied the derivatives, securities and loan markets. Several issues and concerns have been raised by market participants.

The FMLC has taken great interest in these issues over the years, and even before the 2017 announcement. It has published prolifically on benchmark reform, benchmark transition, LIBOR and SONIA. Its Scoping Forums—and in particular the Infrastructure and Banking Forums—have continued to discuss preparations for the transition from LIBOR.

In October 2020, the FMLC published a Report surveying the uncertainties in the context of LIBOR transition and the steps being taken by authorities around the world so as to draw attention to any residual issues. The paper, although a departure from the Committee’s usual approach, is intended to provide a brief overview of the Committee’s views as to the risks arising in respect of benchmark reform, from the transition from LIBOR, and from the U.K.’s impending withdrawal from the E.U. It considers the specific ways in which it may be possible to mitigate the legal uncertainties in this context—including by legislative, regulatory or market action.  In examining each option, the FMLC has drawn out the strengths and weaknesses and attempted to present a thorough-going, impartial and publicly accessible account.

Please click on the links above to see the FMLC’s publications and FMLC CEO Joanna Perkins’ speeches on these topics. Should you wish to discuss this further or raise an issue of uncertainty, please contact FMLC Research Manager, Venessa Parekh, at