On January 27, 2022, the United States Court of Appeals for the Second Circuit acquitted two former traders, Matthew Connolly and Gavin Campbell Black, who had been convicted by a jury for wire fraud as well as conspiracy to commit bank and wire fraud in a scheme to manipulate the London Interbank Offered Rate (“LIBOR”). … Continue Reading
Global and US financial services regulators are increasing their warnings on the impending end to the use of the London Interbank Offering Rate (LIBOR) as a reference rate in financial contracts and the risk to the global financial system if there is inadequate preparation by financial institutions. Most LIBOR settings are ending this year, with … Continue Reading
Following up on our past posts on the transition away from the use of the London Interbank Offering Rate (“LIBOR”) as a reference rate, recently, the Board of Governors of the Federal Reserve System (FRB) issued a letter setting forth guidance for FRB examiners to assist in their assessment of the progress of FRB-supervised firms … Continue Reading
On April 6, 2021, New York Governor Mario Cuomo signed into law legislation tackling the uncertainties surrounding the LIBOR transition, particularly for legacy contracts. The new law amends the New York State General Obligations Law by adding a new Article 18-C, and is limited to contracts governed by New York law that are either silent … Continue Reading
On Friday, March 5, 2021, the US Alternative Reference Rates Committee (ARRC), the group of private sector and government agencies working on alternatives to the end of the use of LIBOR, issued a press release commending the issuances by ICE Benchmark Administration (IBA), the LIBOR administrator, and the UK Financial Conduct Authority (FCA), confirming that … Continue Reading
The Intercontinental Exchange, Inc. (“ICE”) recently released a consultation that the administrator of LIBOR, ICE Benchmark Administration Limited (“IBA”), requesting feedback on a decision to cease publication of the overnight, one-, three-, six- and twelve-month U.S. Dollar LIBOR (“LIBOR”). The previous expectation was that publication would stop at the end of 2021. It now appears … Continue Reading
The UK Financial Conduct Authority has warned that the London Interbank Offered Rate (LIBOR) is not likely to be published after 2021. What will happen to LIBOR-based municipal securities, loans, and derivatives that extend beyond 2021, if and when LIBOR goes away? The contracts could be remediated by pending New York and possible federal LIBOR … Continue Reading
On 20 November 2020, the Financial Stability Board (FSB) published a progress report on implementation of reforms to major interest rate benchmarks. Among other things the report notes: Production of LIBOR cannot be guaranteed after the end of 2021. The administrator of LIBOR, ICE Benchmark Administration, has recently announced that it will consult on its … Continue Reading
The Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency (collectively, the “Banking Agencies”) issued a statement (“Statement”) on November 6, 2020, regarding the upcoming discontinuation of LIBOR as a reference rate. Referencing a recent statement on the LIBOR transition issued by … Continue Reading
When the use of LIBOR as a reference rate in financial contracts is phased out at the end of 2021, those contracts currently utilizing LIBOR may face costly litigation, renegotiation and market disruption. On October 28, 2020, New York State Senate Bill S9070 (“S9070”) was introduced and is intended to possibly pre-empt much of that … Continue Reading
Introduction On October 23, 2020, the International Swaps and Derivatives Association (“ISDA”) released the ISDA IBOR Fallbacks Protocol (“Protocol”) and a Supplement to the 2006 ISDA Definitions (“Supplement”). While the Supplement amends definitions to the 2006 ISDA Definitions, it only amends definitions for new contracts. The Protocol gives participants an opportunity to amend existing contracts. … Continue Reading
On August 31, 2020, in response to requests by the Alternative Reference Rates Committee (ARRC), the US Commodities Futures Trading Commission (CFTC) issued revised no-action letters to swap dealers and other market participants relating to the transition from use of the London Interbank Offered Rate (LIBOR) as a reference rates in transactions. These letters supersede … Continue Reading
With the potential end of LIBOR quickly approaching in only 16 months, the ARRC has been publishing many helpful resources to aid in the market’s transitions from LIBOR to SOFR, including multiple quick reference resource guides listed below. As part of the ARRC’s Summer Series (a webinar series aimed at educating the public about SOFR … Continue Reading
As noted in previous LIBOR Transition posts, the availability of LIBOR as a reference rate is not guaranteed beyond the end of 2021. On July 1, 2020, the Federal Financial Institutions Examination Council (FFIEC), which consists of US federal and state banking regulators and the Consumer Financial Protection Bureau, issued a Joint Statement highlighting the … Continue Reading
LIBOR is used as a component of an interest or finance charge in consumer transactions as well as the commercial transactions we have discussed in prior LIBOR Transition posts. On June 4, 2020, the US Consumer Financial Protection Bureau (CFPB), issued a proposed rule that would amend US consumer credit regulations to address the pending … Continue Reading
Following on our post discussing the ARRC’s publication of their 2020 Key Objectives, we mentioned that ARRC panned to release a set of recommended best practices. As promised, the ARRC has published guidance for Best Practices for Completing the Transition from LIBOR (“Best Practices Guidance”), along with an accompanying ARRC fact sheet, which sets forth … Continue Reading
Following on our post discussing the ARRC’s recommendations outlining a spread adjusting procedure, we mentioned that the ARRC planned to release a more detailed final recommendation of the spread adjustment methodology for cash products. On May 6, 2020, the ARRC released a supplemental consultation seeking further views on certain technical questions for the spread adjustment … Continue Reading
Following up on our past posts on the transition away from the London Interbank Offering Rate (“LIBOR”), and other interbank offering rates (“IBOR”) denominated in other currencies, in this post, we discuss the ARRC key objectives for 2020 released by the Alternative Reference Rates Committee (“ARRC”), the group of private market participants advising the Federal … Continue Reading
Following up on our past posts on the transition away from the London Interbank Offering Rate (“LIBOR”), and interbank offering rates (“IBOR”) denominated in other currencies, in this post, we discuss the agreement reached by the members of the Alternative Reference Rates Committee (“ARRC”) on a spread adjustment methodology for cash products referencing U.S. dollar … Continue Reading
Following up on our past posts on the transition away from the London Interbank Offering Rate (“LIBOR”), and other interbank offering rates (“IBOR”) denominated in other currencies, in this post, we discuss the proposal from the Alternative Reference Rates Committee (“ARRC”) consultation on fallback contract language for new variable rate private student loans. This is … Continue Reading
Following up on our past posts on the transition away from the London Interbank Offering Rate (“LIBOR”), and other interbank offering rates (“IBOR”) denominated in other currencies, we discuss the proposal from the Alternative Reference Rates Committee (“ARRC”) for New York legislation, which was published on March 6, 2020. The ARRC is a group of … Continue Reading
Following up on our past posts, in this update on the transition away from LIBOR (London Interbank Offering Rate), and other interbank offering rates (“IBOR”) denominated in other currencies, we discuss a Structured Finance Association (“SFA”) survey with respect to potential LIBOR transition solutions in the securitization industry. The SFA is group of structured finance … Continue Reading
Following up on our past LIBOR posts, in this update on the transition away from LIBOR (London Interbank Offering Rate), and other interbank offering rates (“IBOR”) denominated in other currencies, we discuss some recent issuances by global and US government regulators on the LIBOR transition. The LIBOR transition requires considerable work from all market participants … Continue Reading
Following up on our past LIBOR posts, this update on the transition away from LIBOR (London Interbank Offering Rate), and other interbank offering rates (“IBOR”) denominated in other currencies, we discuss in this post the Alternative Reference Rates Committee (“ARRC”) and its role in potential New York State legislation with respect to the LIBOR transition. … Continue Reading
