Yet in the decade since LIBOR’s age really began to show, some have clung to the hope that it might just push on. After all, how could such a well-known colleague ever leave? Few can still harbour that illusion after the announcements of recent weeks.3 Subject to the outcome of IBA’s consultation launched last Friday,4 the LIBOR panels for sterling, yen, Swiss Franc, euro and the less heavily traded dollar tenors will cease at the end of 2021. And, although the panels for more heavily used US dollar settings will stick around for a short while longer, to support legacy business, the US and UK authorities have been absolutely clear that new use of these rates must stop at the end of 2021,5 in line with everywhere else. LIBOR’s long career is drawing to an end. It’s time to bow out gracefully. Of course, as with any departure, there’s lots to do to ensure a smooth transition – and I want to highlight three key actions for market participants in the months ahead. 1  https://www.bankofengland.co.uk/speech/2019/andrew-hauser-speech-at-risk-live-2019-london https://www.bankofengland.co.uk/bank-overground/2020/why-do-firms-need-to-accelerate-the-transition-from-libor-benchmarks See ‘The Future of LIBOR’ section at https://www.theice.com/iba/libor and https://www.fca.org.uk/news/statements/fca-consults-onnew-benchmark-powers 4 https://www.theice.com/publicdocs/ICE_LIBOR_Consultation_on_Potential_Cessation.pdf 5 https://www.federalreserve.gov/newsevents/pressreleases/files/bcreg20201130a1.pdf and https://www.fca.org.uk/news/statements/fca-response-iba-proposed-consultation-intention-cease-us-dollar-libor 2 3  2  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  2  1. Moving all new business off LIBOR  The first priority is to break the remaining grip of LIBOR on new lending and other business as soon as possible before the end of 2021.

I am not advocating for a vast expansion of the role of the compliance function. It is tempting to think that vesting compliance officers with greater and greater authority over business will lead to better outcomes—at least in terms of the safety and soundness of the financial institution. But, I am very sensitive to the risk that as compliance becomes more involved in business decisions, it loses its independence. That independence is critical to effective governance and, ultimately, to the safety and soundness of an institution. What’s more, there is some point at which compliance becomes an end in itself, detracting from broader corporate and social purposes. I will return to this thought later. Here is my point: Most if not all firms could use greater clarity about who is responsible for what within their organization. I offer this observation based, in part, on the compliance enhancements required in many Federal Reserve enforcement actions. Many compliance professionals have a very clear understanding of their own role—in terms of both duties and limitations—and strive to maintain their independence. I am less confident about the degree to which others in an institution are aware of what the role of compliance is, and what it is not. A shared understanding between business and compliance about this is critical. A misunderstanding of roles can lead to confusion of responsibility (or diffusion of responsibility), laying the groundwork for control failures. Let me explain how confusion about rules might play out.