Welcome to the latest issue of Mayer Brown’s IBOR Transition Digest—a periodic compendium of global regulatory and market developments and insights on the complex issues confronting financial market participants as they plan to transition from LIBOR and its variants to replacement benchmark interest rates. As attention to IBORtransition accelerates and becomes more focused, it is critical to have access to comprehensive and timely resources about the market.
For additional resources and an introduction to our global cross-practice IBOR Transition Task Force, please visit Mayer Brown’s IBOR Transition portal.
Financial Stability Board Releases Latest Progress Report on LIBOR Transition, Urging Action to Complete Transition by Year-End and Calling Out the Loan Markets
Eye on IBOR Transition blog, 7 July 2021
The report finds that adequate tools necessary to complete transition are and have been available, and that active market engagement and international coordination and consistency are crucial.
Eeny, Meeny, Miny, Muse; Which LIBOR Alternative Shall I Choose?
Eye on IBOR Transition blog, 30 June 2021
Summarizing what we know so far about the six alternative benchmarks vying to replace USD LIBOR.
Mayer Brown 7th OTC Derivatives Seminar: Recordings, Slides and Materials Made Available in this Post
The Long and Short of It blog, 30 June 2021
A number of sessions include IBOR-related topics. Links to program materials are included.
United States – General
Prepared Remarks of SEC Chair Gary Gensler at London City Week
Securities and Exchange Commission, 23 June 2021
Reiterating his remarks on 11 June 2021 at the Financial Stability Oversight Council meeting, SEC Chair Gensler noted, “I have concerns that as LIBOR is replaced, a number of commercial banks are advocating for replacement indices that are still reliant on short-term, unsecured, bank-to-bank lending.”
FHFA Supervisory Letter: Alternative Reference Rate Selection Risk Management
Federal Housing Finance Agency, 1 July 2021
Providing guidance on the criteria that should be considered in selecting an alternative benchmark rate, and advising that Federal Home Loan Banks “need to provide advance notice to their respective Examiner-in-Charge of plans to use an alternative reference rate not already being used by the FHLBanks.”
ARRC Welcomes FHFA Supervisory Letter on Transition Away from LIBOR
Alternative Reference Rates Committee, 1 July 2021
ARRC Chairman Tom Wipf stated that the FHFA supervisory letter is “very much in line with the points that the ARRC has made.”
United Kingdom – General
LMA response to FCA consultation on powers for use over critical benchmarks
Loan Market Association, 17 June 2021
Responding to the FCA’s 11 consultation questions and stressing “the importance of international consistency, not creating an unlevel playing field which could pose a threat to market integrity.”
LIBOR – 6 months to go – speech by Edwin Schooling Latter at UK Finance’s Commercial Finance Week
Financial Conduct Authority, 5 July 2021
Criticizing “so-called ‘credit sensitive’ rates,” and stating, “We all want a good strong finish, not to fade or stumble in the home straight.”
Global - General
Progress Report to the G20 on LIBOR transition issues: Recent developments, supervisory issues and next steps
Financial Stability Board, 6 July 2021
Outlining the risks, challenges, and key themes associated with LIBOR transition, and urging, “Given the limited time available until end-2021, the FSB strongly urges market participants to act now to complete the steps set out in its Global Transition Roadmap.” The FSB calls out the loan markets as “an area of particular concern.”
FSB urges action to complete the transition away from LIBOR by end-2021
Financial Stability Board, 6 July 2021
“With timelines for cessation of LIBOR panels now confirmed, there should be no remaining doubts as to the urgency of the need to transition away from LIBOR by the end of 2021.”
Replays of all of our IBOR Transition Webinar Series presentations are available via iTunes podcasts, Google play or Spotify, as well as on the IBOR Transition Webinar Series page of our dedicated IBOR Transition portal.