Andrew Bailey, FCA Chief Executive, set out in a speech earlier this year that, whilst significant improvements have been made to LIBOR since April 2013, the absence of active underlying markets means that the future sustainability of LIBOR cannot be guaranteed. The support of the panels for LIBOR is needed until the end of 2021, by when a transition can be made to alternative rates.
The FCA has been working with the panel banks to finalise an agreement for the banks to remain on the panels they currently submit to until the end of 2021.
The FCA welcomes the support and agreement of all banks to remain as submitters until 2021. Today there will be two amendments to individual panel compositions. Societe Generale will cease submissions to the US Dollar panel and Credit Agricole Corporate and Investment Bank will cease submissions to the Japanese Yen panel. Both banks will continue to submit to all other panels to which they currently contribute. All of the 20 panel banks have provided their support and the FCA does not expect to see any further changes to the LIBOR panels.
Based on this support until the end of 2021, the FCA expects focus to turn towards developing alternative rates and working towards a transition that can be executed smoothly.
- LIBOR is the London Interbank Offered Rate
- Andrew Bailey speech on ‘The future of LIBOR’
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