From LIBOR to SONIA: a bridge to the future  Remarks given by Andrew Hauser, Executive Director, Markets At the ‘Is Your Business Prepared for LIBOR?’ webinar 18 September 2020  I am grateful to Stefania Spiga for her help in writing these remarks, and to Amber Evans, Tom Horn, Al Hughes and Alieda Moore for their input and guidance. 1  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  Thank you Phil. It’s great to be with you, and it’s great to have such a fantastic line up to discuss this vital issue for every company in the UK. We’re here today to talk about what it will take to get your business ready to transition away from LIBOR. But I want to start somewhere different. I want to start with a bridge: Hammersmith Bridge in London, to be precise. It’s been around forever. People love it: it can carry over 20,000 vehicles a day. And to the naked eye, it seems in the prime of health: beautiful to look at, safe as houses? Well no, actually: it’s completely unsafe. Below that shining metalwork, there are big and growing cracks – and sooner or later, if nothing is done, someone driving over it is going to fall headfirst into the Thames. So the local council has closed the bridge – it had no choice. But the disruption has been huge. Journeys that used to take a few minutes can now take hours. There are traffic jams everywhere.

Further details will be given on their LinkedIn page. o  You can find help from the organisations co-sponsoring this event, the Association of Corporate Treasurers and the Confederation of British Industry. Both have a wealth of knowledge and experience with transition – as do UK Finance. o  And, if you don’t see what you need, please ask on this session today or later, via your bank, the Working Group, the ACT, the CBI or UK Finance. We are acutely aware this is a difficult time for many businesses, facing an uncertain future in the midst of the Coronavirus epidemic. But it’s just not safe to keep relying on Libor. And it’s not good for your business 2 https://www.rbs.com/rbs/news/2019/07/natwest-completes-markets-first-sonia-loan-for-national-express.html 3 https://www.riverside.org.uk/riverside-breaks-new-ground-with-sector-first-100m-sonia-revolving-loan-facility/ 4 https://www.allenovery.com/en-gb/global/news-and-insights/news/ao-advises-hsbc-bank-as-coordinator-on-new-risk-free-rate-loan-facilities-for-  glaxosmithkline-plc 5 The Working Group of Sterling Risk-Free Reference Rates website is available at: https://www.bankofengland.co.uk/markets/transition-to-sterlingrisk-free-rates-from-libor 3  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  3  either. A benchmark based on guesswork can’t be relied upon to behave in your interests at times of stress. We saw a vivid illustration of just that in March, when the Bank of England and the Federal Reserve both cut official interest rates sharply, but LIBOR rates actually rose – at a time when transactions underpinning those measures were near-zero. It really is time to get off that failing bridge before it closes for good. We’re here to help, and I look forward to our discussions here this morning. 4  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  4