On 3 July 2023, the FCA issued a statement to confirm that the US dollar LIBOR bank panel ended on 30 June 2023. This was the last remaining LIBOR panel.

The FCA notes that the overnight and 12-month US dollar LIBOR settings have now permanently ceased. The 1-, 3- and 6-month US dollar LIBOR settings have been designated as Article 23A benchmarks and the FCA is requiring LIBOR’s administrator, ICE Benchmark Administration, to publish them in synthetic form. From now on, they will be calculated using a synthetic methodology based on the relevant CME Term SOFR Reference Rate plus the respective ISDA fixed spread adjustment. However, as with other synthetic LIBOR rates, these settings are now permanently unrepresentative of the underlying markets they previously sought to measure.

Firms must ensure they are prepared for these final synthetic LIBOR settings to cease at the end of September 2024, and all new use of synthetic US dollar LIBOR is now prohibited under the Benchmarks Regulation.

The statement flags that parties to contracts still referencing US dollar LIBOR should be taking steps to transition to robust, appropriate reference rates, re-negotiating with counterparties where necessary. It reminds firms that it does not wish to see transition to so-called ‘credit sensitive’ rates which have the potential to reintroduce many of the financial stability risks associated with LIBOR.