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.

Whether your firm is a lender or a borrower, you must be ready to transact any new or refinanced lending on a non-LIBOR basis next year, a point underscored in a joint statement by US regulators last week. For firms with further to go, that could mean: spending time understanding the new non-LIBOR products; completing governance processes; or adapting systems. 6  https://www.bankofengland.co.uk/news/2020/september/fca-and-boe-joint-statement-on-sonia-interest-rate-swap Other than for risk management of existing positions. For sterling market milestones, see https://www.bankofengland.co.uk/-/media/boe/files/markets/benchmarks/rfr/rfr-working-grouproadmap.pdf 7 8  3  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  3  But whatever it is you need to do, make sure you’re not left behind. Help is available from your banks, trade associations and industry working groups.9  2. Adopting the ISDA fallbacks for existing derivatives  Redirecting new business away from LIBOR is the critical step for securing the future. But we must ensure that LIBOR-linked business from the past is made safe too. The vast majority of that business, by value, lies in the hundreds of trillions of dollars of LIBOR derivatives contracts stretching beyond end-2021. Leaving those contracts without clarity when LIBOR ends is unthinkable – but so is the idea of negotiating over each contract individually to achieve that. That’s why ISDA, supported by the Financial Stability Board (FSB), has worked with market participants and regulators over many years to identify a fair and robust mechanism for these contracts to convert to risk-free rates.