The end date for LIBOR is just months away. For those treasurers who haven’t acted already, now is the time to identify LIBOR exposures, have a contingency plan for accidental oversights, and understand the different challenges presented by the new market risk-free rates.
Following years of planning and speculation, 5 March 2021 saw the cessation dates for the publishing of the London Inter-bank Offered Rate (LIBOR) confirmed by both the UK Financial Conduct Authority (FCA) and LIBOR’s administrator, ICE Benchmark Administration (IBA). This brought some much-needed clarity to the LIBOR transition timetable for banks and corporate treasurers. The outcome of these statements is that 30 LIBOR settings – all non-US dollar tenors plus one-week and two-month US dollar LIBOR – will either cease or become non-representative after 31 December 2021, while the remaining five US dollar LIBOR settings will continue to be published on a representative basis until 30 June 2023. For treasurers, the rapidly approaching end-of-year deadline is the one to be working towards.
Head of Public Affairs & Policy, European Association of Corporate Treasurers (EACT)