Although referenced in the appendix below, the Sterling Working Group monthly newsletter is a really handy one-pager (covering all currencies) – definitely worth signing up for.
There are relatively few developments in LIBOR transition this month – as should be expected given the looming 31 December deadline for transition of all GBP contracts. Most of the ‘news’ is in the USD markets which are now ramping up to meet the year end deadline after which no new USD LIBOR contracts will be permitted.
GBP markets
The legislation to support an orderly wind down of critical benchmarks (enabling the temporary production of a synthetic LIBOR) continues its way through Parliament and is expected to complete its passage in the next few weeks.
Whilst synthetic LIBOR may address immediate difficulties in transitioning contracts away from LIBOR, it’s not a long-term solution and we expect the regulators to urge regulated businesses (banks) to move any contracts referencing synthetic LIBOR to alternate reference rates during 2022.
As mentioned before, synthetic LIBOR is only a temporary fix…
USD market
A recent ARRC symposium “The SOFR Symposium: The Final Year” included remarks from the Acting Comptroller of the Currency (OCC) Michael J. Hsu amongst many others and highlights views from banks and borrowers on their preparedness for no new LIBOR by Year-End – link to the webcast here.
This is a useful listen for anyone with USD exposures.
A few specific developments are worth noting:
It feels as though attention has turned to the US in the last few weeks but we would be keen to hear of any issues you encounter (in any currency). Please drop a note to technical@treasurers.org with queries or observations.
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Appendix
We are going to include this appendix each month as a quick reference for useful sources:
For the latest markets data, we’d recommend ‘going to the source’, so the RFR WG in the UK; the ARRC in the USA etc.
By currency, the ‘source’ information comes from:
The RFRWG also publishes a monthly newsletter offering a one-page summary of latest developments. Sign up to receive it monthly - the latest (October) version is here.
If you are looking for suggested ways of approaching the transition project, the ACT website has resources.
Other useful resources include relationship banks, advisers, trade associations such as UK Finance and the FICC Markets Standards Board (FMSB).