Libor to cease for most currencies in December

Written by Adam Cadle

05/03/2021

Libor is to formally cease for most currencies by the end of the year, the FCA has said.

The regulator confirmed that all Libor settings in the case of sterling, euro, Swiss franc and Japanese yen, and the 1-week and 2-month US dollar will either cease to be provided by any administrator or no longer be representative immediately after 31 December 2021.

In the case of the remaining US dollar settings the cut off point will be immediately after 30 June 2023.

The Bank of England (BoE) and the FCA have made it clear over a number of years that the lack of an active underlying market makes Libor unsustainable, and unsuitable for the widespread reliance that had been placed upon it. Accordingly, both have worked closely with market participants and regulatory authorities around the world to ensure that robust alternatives to Libor are available and that existing contracts can be transitioned onto these alternatives to safeguard financial stability and market integrity.

"Market-led working groups and official sector bodies, including the Financial Stability Board, have set out clear timelines to help market participants plan a smooth transition in advance of Libor ceasing," the FCA said in a statement.

BoE governor Andrew Bailey added:‘Today’s announcements mark the final chapter in the process that began in 2017, to remove reliance on unsustainable Libor rates and build a more robust foundation for the financial system. With limited time remaining, my message to firms is clear – act now and complete your transition by the end of 2021.’

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