Following Andrew Bailey’s speech withdrawing the FCA’s support for LIBOR by the end of 2021, financial market participants have been examining the best approach to address this major reform.

The Bank of England’s Risk Free Rate Working Group has chosen SONIA as the future sterling market RFR benchmark rate and the Working Group’s current mandate is to ensure a market wide transition to SONIA as the primary sterling interest rate benchmark in bond, loan and derivatives markets by the end of 2021.

The IA is leading the engagement with investment managers to identify the impacts of this significant change on their business and facilitate an effective transition to SONIA with the least amount of disruption.


June 2019

The Bank of England hosted event on the LIBOR to SONIA Transition on Wednesday 5 June. 

The Bank of England, Financial Conduct Authority and the Working Group on Sterling Risk Free Reference Rates jointly held a conference on work underway to transition from LIBOR to alternative risk-free interest rates . 

The aim of the conference was to bring together senior policymakers, market participants and other stakeholders who rely on LIBOR to discuss progress that has been made by the Sterling market in adopting alternative interest rates, to assess the remaining challenges in adopting SONIA, setting out the agenda for the Working Groups on Sterling Risk Free Reference Rates, and to share thematic feedback from the Dear CEO exercise.

On the keynote panel were:

  • Andrew Bailey(CEO FCA)
  • Dave Ramsden(Deputy Governor Bank of England)
  • Tushar Morzaria(CFO Barclays)

Key Messages from the Panel:

  • Firms must have the cessation of LIBOR as their base case for planning. 
  • The best responses to the Dear CEO Letter were ‘whole firm responses’ that incorporated input from front, back and middle offices. 
  • Firms must have a granular strategy for identification and quantification of their risk & exposure to LIBOR. 
  • Supervision in FCA & the Bank will be looking for these exposure numbers to managed down over time. 
  • Firms should engage in scenario planning for the end of LIBOR (managed ending, disorderly ending and partial cessation of LIBOR).
  • Conduct risks should be considered when transitioning from LIBOR to SONIA, particularly conflicts of interest. However the FCA and the Bank are in ‘problem solving mode’. Firms are encouraged to approach the regulator with any issues and they will seek to be as helpful as possible. 

The Bank has published thematic feedback from the Dear CEO Letter. The full text of the speeches is on the Bank of England website. A video of the session is available here.

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The Future of LIBOR webinar

With the FCA indicating that it regards the current approach to calculating LIBOR as unsustainable, it expects firms to transition to alternative risk free reference rates before the end of 2021.

November 2018

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Preparing for 2022: What you need to know about LIBOR transition

Pack prepared by the Working Group on Sterling Risk-Free Rates

November 2018

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Interest rate benchmark reform: transition to a world without LIBOR

Speech by Andrew Bailey reiterating the urgency for market participants to start transitioning

July 2018

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Time to Act Now

LIBOR transition for investment managers
July 2020
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IBORs and ARRs currency tracker

September 2020
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LIBOR Transition Roadmap For Investment Managers

February 2019
For further information please contact:

Ross Barrett: Senior Policy Adviser, Investment & Capital Markets
Irene Rey: Policy Adviser, Investment & Capital Markets
Visit the Bank of England’s website for an overview on the sterling markets RFR transition process.