USD LIBOR: Difference between revisions

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(Update for FCA's confirmation of synthetic cessation end-September 2024.)
(Update for cessation of LIBOR.)
 
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USD LIBOR ceased publication at the end of June 2023.
USD LIBOR ceased publication at the end of June 2023.


A temporary synthetic USD LIBOR has been put in place until September 2024 to support the transition of legacy transactions that have not yet transferred to an appropriate replacement risk-free rate, such as SOFR.
A temporary synthetic USD LIBOR was put in place until September 2024 to support the transition of legacy transactions that have not yet transferred to an appropriate replacement risk-free rate, such as SOFR.




USD LIBOR provided an indication of the average rate at which contributory panel banks in London could obtain wholesale, unsecured funding for a given period, denominated in USD.
USD LIBOR provided an indication of the average rate at which contributory panel banks in London could obtain wholesale, unsecured funding for a given period, denominated in USD.


LIBOR ended in September 2024.


:<span style="color:#4B0082">'''''New use of USD LIBOR is banned'''''</span>


:"The remaining 5 US dollar LIBOR settings will continue to be calculated using panel bank submissions until mid-2023.
:<span style="color:#4B0082">'''''The end of LIBOR'''''</span>


:However, new use of US dollar LIBOR is now banned, with limited exceptions.  
:"Yesterday, 30 September 2024, the remaining synthetic LIBOR settings were published for the last time and LIBOR came to an end. All 35 LIBOR settings have now permanently ceased.


:The US dollar risk-free rate SOFR is already being widely used in new business.  
:The transition away from LIBOR, once referenced in an estimated $400 trillion of financial contracts, has made financial markets safer, more stable and fit for modern use. UK regulators, their international counterparts and market participants have worked together over the past decade to move to risk-free rates (“RFRs”), based on robust data.


:Firms should now focus on converting their legacy US dollar LIBOR contracts by mid-2023."
:Synthetic LIBOR was a temporary bridge to give firms more time to move outstanding legacy LIBOR-linked contracts towards alternative RFRs, allowing for an orderly cessation."


:''Changes to LIBOR as of end-2021 - Financial Conduct Authority.''
:''Press release - Bank of England - 1 October 2024.''
 
 
:<span style="color:#4B0082">'''''Wind-down of LIBOR'''''</span>
 
:"We are proposing to require LIBOR’s administrator, IBA, to continue to publish the 1-, 3- and 6-month US dollar LIBOR settings under an unrepresentative ‘synthetic’ methodology until end-September 2024.
 
:After this, publication would cease permanently.
 
:For sterling LIBOR, we intend to continue to require IBA to publish the 3-month synthetic sterling LIBOR setting until end-March 2024, after which it will cease permanently.
 
:The effect of these announcements and proposals is that the final LIBOR publication would be end-September 2024:
 
:*the 3 synthetic yen LIBOR settings will cease at end-2022
:*the 1- and 6-month synthetic sterling LIBOR settings will cease at end-March 2023
:*the overnight and 12-month US dollar LIBOR settings will cease at end-June 2023
:*the 3-month synthetic sterling LIBOR setting will cease at end-March 2024 
:*the 1-, 3- and 6-month synthetic US dollar LIBOR settings would cease at end-September 2024"
 
:''Further consultation and announcements on the wind-down of LIBOR - Financial Conduct Authority - 23 November 2022.''




== See also ==
== See also ==
* [[Alternative Reference Rates Committee]] (ARRC)
* [[Alternative Reference Rates Committee]] (ARRC)
* [[Bank of England]]
* [[Benchmark]]
* [[Benchmark]]
* [[Financial Conduct Authority]]  (FCA)
* [[Financial Conduct Authority]]  (FCA)
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* [[USD]]
* [[USD]]
* [[Wholesale]]
* [[Wholesale]]




==Other resources==
==Other resources==
*[https://www.bankofengland.co.uk/news/2024/october/the-end-of-libor The end of LIBOR - Press release - Bank of England - 1 October 2024]
*[https://www.fca.org.uk/news/news-stories/3-month-synthetic-sterling-libor-1-month-go#:~:text=FCA%20issues%20final%20message%20before,permanently%20on%2028%20March%202024. Synthetic USD LIBOR to cease at end-September 2024 - Financial Conduct Authority - 29 February 2024]
*[https://www.fca.org.uk/news/news-stories/3-month-synthetic-sterling-libor-1-month-go#:~:text=FCA%20issues%20final%20message%20before,permanently%20on%2028%20March%202024. Synthetic USD LIBOR to cease at end-September 2024 - Financial Conduct Authority - 29 February 2024]


Latest revision as of 00:21, 3 October 2024

Benchmark interest rates - LIBOR.

USD LIBOR ceased publication at the end of June 2023.

A temporary synthetic USD LIBOR was put in place until September 2024 to support the transition of legacy transactions that have not yet transferred to an appropriate replacement risk-free rate, such as SOFR.


USD LIBOR provided an indication of the average rate at which contributory panel banks in London could obtain wholesale, unsecured funding for a given period, denominated in USD.

LIBOR ended in September 2024.


The end of LIBOR
"Yesterday, 30 September 2024, the remaining synthetic LIBOR settings were published for the last time and LIBOR came to an end. All 35 LIBOR settings have now permanently ceased.
The transition away from LIBOR, once referenced in an estimated $400 trillion of financial contracts, has made financial markets safer, more stable and fit for modern use. UK regulators, their international counterparts and market participants have worked together over the past decade to move to risk-free rates (“RFRs”), based on robust data.
Synthetic LIBOR was a temporary bridge to give firms more time to move outstanding legacy LIBOR-linked contracts towards alternative RFRs, allowing for an orderly cessation."
Press release - Bank of England - 1 October 2024.


See also


Other resources

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