of scenarios. it is promising to see the progress made in sonia and as liquidity continues to shift, the benefits of transitioning new business from libor becomes even clearer. but it is also imperative we have a clear path for existing or ‘ legacy ’ libor contracts to transition in a robust manner. legislative processes in the us, eu and uk continue to progress in establishing safety nets for those contracts that can ’ t actively transition ahead of cessation. strong adherence to the isda ibor fallbacks protocol, in the us and uk in particular, has been encouraging. clearing houses are also following suit with their own conversion processes on similar terms. we estimate over 97 % of sterling interest rate derivatives have a robust safety net in place. [ 7 ] but more can and should be done – the protocol remains open for entities that have not yet adhered and it is critical that equally robust fallback arrangements are adopted in cash products too. descending safely : life after libor ‐ speech by andrew bailey | bank of england while it is always the right choice to install the safety net to break your fall in the form of fallbacks, this shouldn ’ t be seen as a substitute for pre - emptive action, ensuring a sure footing on the descent. active transition ahead of libor cessation remains an important part of easing the gradient of that descent – it ensures contractual certainty and allows borrowers, lenders, issuers and investors to retain economic control over their contracts. gbp bond markets are again leading the way, as we have seen over 50 bonds with a value of around £40 billion actively transitioned from gbp libor to sonia. where tough legacy contracts are able to take advantage of that safety net, for example in the form of the proposed synthetic libor we should be clear that this a temporary solution. [ 9 ] supervisory engagement will continue after the end of this year to ensure regulated firms continue to manage that rump and move those exposures onto robust alternatives where that is possible. as those facilities re - new, in most case they should move to the most robust rate available, where we expect the most liquidity to be – in sterling that will be sonia compounded in arrears. the use of forward looking term risk - free rates let me now turn to the critical element of any journey – the destination. the reference rates the market transitions to are important choices. a broad - based transition to more robust overnight risk - free rates can provide the safe descent

interest rate benchmark reform : overnight risk - free rates and term rates 11. interim financial stability report - may 2020 12. consultation on term sonia reference rates – summary of responses 13. ice term sonia reference rates ; refinitiv term sonia 14. standard on use of term sonia reference rates 15. investor size, liquidity and prime money market fund stress 16. re : transition to the secured overnight financing rate – the views of nonfinancial corporations descending safely : life after libor ‐ speech by andrew bailey | bank of england andrew bailey governor, bank of england sign up for latest updates descending safely : life after libor ‐ speech by andrew bailey | bank of england