Working Group on Sterling Risk-Free Reference Rates Publishes Roadmap for Ceasing New GBP LIBOR Lending by Q4 2020
03/10/2020The Working Group on Sterling Risk-Free Reference Rates has published two documents relevant to the transition away from the use of LIBOR. The first is a statement on bond market conventions and the second is a path for discontinuation of new GBP LIBOR lending by the end of Q3 2020.
The statement on bond market conventions responds to the Bank of England's announcement on February 26, 2020 that it intends to publish a daily Sterling Overnight Index Average index from July 2020 and asking stakeholders for feedback on the proposal as well as the proposed set of compounded SONIA period averages. The Working Group encourages industry to respond to the proposals (submissions can be made until April 9, 2020) and confirms that it has no recommendation as to the preferred approach to be adopted. The Bank is due to confirm in Q2 2020 whether the proposals will proceed and if so, a precise date for the projected July 2020 publication of the index.
The second document concerns the Working Group's aim, announced on January 16, 2020, to stop issuance of cash products linked to sterling LIBOR by the end of Q3 2020. The path sets out an indicative roadmap to achieving the Q3 target and is intended to be a guide for lenders, borrowers and infrastructure providers.
View the statement on bond market conventions.
View details of the Bank of England's discussion paper on the proposed daily compounded SONIA index.
View the path to discontinuation of new GBP LIBOR lending.
View details of the January 2020 announcement.
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