The end of 2021 marked a major milestone in the transition away from LIBOR and the FSB welcomes the smooth transition to robust alternative rates across global markets, primarily overnight risk-free or nearly risk-free rates (RFRs).
The Financial Stability Board (FSB) today published a statement welcoming the smooth transition away from LIBOR at the end of last year.
The absence of any significant market
disruptions is a testament to the magnitude of market participants’
efforts and the level of attention from the regulators and industry
bodies to support the transition to RFRs.
Given the significant use of USD LIBOR globally, the FSB emphasises
that firms must have plans in place to ensure their preparedness for the
cessation of the USD LIBOR panel. Firms should have already ceased new
use of USD LIBOR. 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.
To ensure financial stability, it is important that market
participants transition from LIBOR and other IBORs that are set to be
discontinued. The FSB 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 RFRs, across all global markets.
The FSB plans to conduct a follow-up assessment in H2 2022 to
identify any remaining transition and supervisory challenges to support
the LIBOR transition effort. The FSB’s Official Sector Steering Group
(OSSG) 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.
FSB
© FSB - Financial Stability Board
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