United Kingdom (and EU regulation)

FSB urges action to complete the transition away from LIBOR by end-2021

On 6 July 2021, the Financial Stability Board (FSB) published a progress report to the G20 on LIBOR transition and remaining issues.

The progress report to the G20 is structured in four parts:

Section 2 sets the scene on issues and risks associated with LIBOR transition.
Section 3 presents observations and key themes from the FSB’s Official Sector Steering Group as regards remaining aspects of benchmark transition.
Section 4 presents findings from the FSB’s follow-up questionnaire on supervisory issues related to LIBOR transition.
Section 5 sets out conclusions and next steps.

In terms of conclusions and next steps the progress report notes that:

Supervisory authorities should step up their efforts for active and adequate communication to increase awareness of the scope and urgency of relevant IBOR transitions for all clients and other market participants.
Market participants must not wait for development of additional tools to transition away from LIBOR and need to be transitioning to reference rates that are compatible with financial stability and do not reintroduce the vulnerabilities seen with LIBOR in order to support sustained financial stability.
On the international front, collaboration and coordination remain crucial in expediting the transition progress. The FSB encourages authorities to set globally consistent expectations and milestones that firms will rapidly cease the new use of LIBOR regardless of where those trades are booked or in which currency they are denominated.