Featured Product

    UK Authorities Assess LIBOR Transition, Set Out Next Steps

    February 09, 2022

    The Bank of England (BoE), the Financial Conduct Authority (FCA), and the Working Group on Sterling Risk-Free Reference Rates have set out progress on LIBOR transition in the sterling markets, along with the next steps. The joint press release also offers an update on the future actions and operations of the Working Group.

    Below are the key highlights of the recent announcement: 

    • Progress in sterling markets. As per the authorities, the Sterling markets navigated this transition on time and with minimal disruption, supporting global transition efforts toward alternative risk-free reference rates. Thus, the overnight SONIA, compounded in arrears, is now fully embedded across sterling markets. In December 2021, GBP 13 trillion LIBOR-referencing contracts were converted to SONIA, by successful "central clearing party" (CCP) conversion processes. The implementation of the ISDA IBOR fallbacks saw a further reduction in the legacy stock of LIBOR-linked derivatives. BoE estimates that less than 2% of the total sterling LIBOR legacy stock remains across all asset types and expects that firms have plans to address this residual exposure.
    • Next steps. BoE, FCA, and the Working Group on Sterling Risk-Free Reference Rates encourage firms to continue to pursue the active transition of legacy sterling LIBOR contracts using the temporary synthetic LIBOR. During 2022, FCA will seek views on retiring one-month and six-month synthetic sterling LIBOR at the end of 2022 and on when to retire the three-month sterling synthetic LIBOR. BoE, FCA, and the Working Group also encourage transition from USD LIBOR to robust alternative rates such as SOFR.
    • Future operations of Working Group. The Working Group concluded at its January meeting that it had met its objective to “catalyze a broad-based transition to SONIA across sterling derivative, loan and bond markets.” Moving forward, the Working Group will focus on finalizing the transition from LIBOR, primarily to support the continued active conversion of legacy sterling LIBOR-linked bonds and loans that are dependent on the temporary synthetic LIBOR and to consider any implications of non-sterling LIBOR transition in UK markets.

     

    Related Link: News Release

    Keywords: Europe, UK, Banking, LIBOR, LIBOR Transition, Interest Rate Benchmarks, Synthetic LIBOR, Benchmark Reforms, Basel, Lending, SOFR, ISDA, FCA

    Featured Experts
    Related Articles
    News

    US Agencies Issue Several Regulatory and Reporting Updates

    The Board of Governors of the Federal Reserve System (FED) adopted the final rule on Adjustable Interest Rate (LIBOR) Act.

    January 04, 2023 WebPage Regulatory News
    News

    ECB Issues Multiple Reports and Regulatory Updates for Banks

    The European Central Bank (ECB) published an updated list of supervised entities, a report on the supervision of less significant institutions (LSIs), a statement on macro-prudential policy.

    January 01, 2023 WebPage Regulatory News
    News

    HKMA Keeps List of D-SIBs Unchanged, Makes Other Announcements

    The Hong Kong Monetary Authority (HKMA) published a circular on the prudential treatment of crypto-asset exposures, an update on the status of transition to new interest rate benchmarks.

    December 30, 2022 WebPage Regulatory News
    News

    EU Issues FAQs on Taxonomy Regulation, Rules Under CRD, FICOD and SFDR

    The European Commission (EC) adopted the standards addressing supervisory reporting of risk concentrations and intra-group transactions, benchmarking of internal approaches, and authorization of credit institutions.

    December 29, 2022 WebPage Regulatory News
    News

    CBIRC Revises Measures on Corporate Governance Supervision

    The China Banking and Insurance Regulatory Commission (CBIRC) issued rules to manage the risk of off-balance sheet business of commercial banks and rules on corporate governance of financial institutions.

    December 29, 2022 WebPage Regulatory News
    News

    HKMA Publications Address Sustainability Issues in Financial Sector

    The Hong Kong Monetary Authority (HKMA) made announcements to address sustainability issues in the financial sector.

    December 23, 2022 WebPage Regulatory News
    News

    EBA Updates Address Basel and NPL Requirements for Banks

    The European Banking Authority (EBA) published regulatory standards on identification of a group of connected clients (GCC) as well as updated the lists of identified financial conglomerates.

    December 22, 2022 WebPage Regulatory News
    News

    ESMA Publishes 2022 ESEF XBRL Taxonomy and Conformance Suite

    The General Board of the European Systemic Risk Board (ESRB), at its December meeting, issued an updated risk assessment via the quarterly risk dashboard and held discussions on key policy priorities to address the systemic risks in the European Union.

    December 22, 2022 WebPage Regulatory News
    News

    FCA Sets up ESG Committee, Imposes Penalties, and Issues Other Updates

    The Financial Conduct Authority (FCA) is seeking comments, until December 21, 2022, on the draft guidance for firms to support existing mortgage borrowers.

    December 20, 2022 WebPage Regulatory News
    News

    FSB Reports Assess NBFI Sector and Progress on LIBOR Transition

    The Financial Stability Board (FSB) published a report that assesses progress on the transition from the Interbank Offered Rates, or IBORs, to overnight risk-free rates as well as a report that assesses global trends in the non-bank financial intermediation (NBFI) sector.

    December 20, 2022 WebPage Regulatory News
    RESULTS 1 - 10 OF 8697