FCA, BoE, and members of the Working Group on Sterling Risk-Free Reference Rates have discussed the impact of the COVID-19 on firms’ LIBOR transition plans over the coming months. The central assumption that firms cannot rely on LIBOR being published after the end of 2021 has not changed and it should remain the target date for all firms to meet. Additionally, BoE published minutes of the SONIA Stakeholder Advisory Group meeting, which was held in February 2020. The Advisory Group supports BoE’s administration of SONIA by providing advice and technical input to BoE and the SONIA Oversight Committee. The Group noted that the withdrawal of UK from EU on January 31, 2020 had no impact on market functioning.
The transition from LIBOR remains an essential task that will strengthen the global financial system. Many preparations for transition will be able to continue. There has, however, been an impact on the timing of some aspects of the transition programs of many firms. Particularly in segments of the UK market that have made less progress in transition and are, therefore, still more reliant on LIBOR, such as the loan market, it is likely to affect some of the interim transition milestones. Alongside other international authorities, BoE, FCA, and the Working Group will continue to monitor and assess the impact on transition timelines and will update the market as soon as possible.
Keywords: Europe, UK, Banking, Securities, LIBOR, COVID-19, Transition Date, SONIA, Risk-free Rates, FCA, BoE
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