On 5 April 2022, the Financial Stability Board (FSB) issued a statement welcoming the smooth transition away from LIBOR at the end of last year.
The FSB also reminds firms that given the significant use of USD LIBOR globally, they should have plans in place to ensure their preparedness for the cessation of the USD LIBOR panel and that they should have already ceased new use of USD LIBOR. The FSB adds that it has been repeatedly emphasised by authorities that the continuation of some USD LIBOR settings through to end-June 2023 is intended only to allow legacy contracts to mature.
The FSB also encourages firms to maintain momentum in active transition of legacy LIBOR contracts that reference synthetic GBP and JPY LIBOR settings. The FSB also continues to support engagement with emerging market and developing economies to maintain a smooth transition from LIBOR to risk free rates, across all global markets.
In H2 2022 the FSB will be conducting a follow-up assessment to identify any remaining transition and supervisory challenges to support the LIBOR transition effort. The FSB’s Official Sector Steering Group will continue to serve as a forum in 2022 and 2023 for cooperation amongst authorities that have leading roles in interest rate benchmark reforms and transition preparedness.