LIBOR for most currency and tenor settings has either ceased or become non-representative as of the end of 2021. USD LIBOR for key tenors is still being published until 30 June 2023, however, this is for legacy use only. There is still some more work to do on the transition to alternative reference rates, particularly in respect of USD facilities. Non-LIBOR currencies are also going through a process of developing and encouraging the use of alternative reference rates either in replacement of, or as a fallback to, domestic interbank term rates. The LMA continues to work with the market, other trade associations and regulators on facilitating a smooth transition.
FSB statement emphasises importance of preparedness for cessation of USD LIBOR and of active transition from LIBOR and other IBORs
On 5 April 2022, the Financial Stability Board (FSB) published a statement welcoming the smooth transition away from LIBOR to robust alternative rates across global markets. Firms should maintain momentum in active transition of LIBOR legacy contracts referencing synthetic GBP and JPY LIBOR settings. The FSB intends to conduct a follow-up assessment in H2 2022 to identify any remaining transition and supervisory challenges in support of LIBOR transition.
Working Group on Euro Risk-Free Rates publishes 2022/23 Work Programme and call for interest on €STR-based forward-looking term structure
On 3 March 2022, the Working Group on Euro Risk-Free Rates (the Euro Working Group) announced its 2022/23 Work Programme alongside a call for expressions of interest from administrators developing €STR-based term structures as a fallback in EURIBOR-linked contracts. The deadline for responses is 8 April 2022.
On 17 February 2022, the US Alternative Reference Rates Committee (ARRC) published its 2022 Objectives (the Objectives). The Objectives reflect the ARRC's efforts to continue supporting transition away from LIBOR, preparing markets for the end of USD LIBOR in 2023, and facilitating the voluntary adoption of SOFR as a more robust and resilient alternative.