In the FSB Statement to Support Preparations for LIBOR Cessation, the Financial Stability Board (FSB) strongly urged market participants to finalize any final steps outlined in the FSB’s Global Transition Roadmap, as most LIBOR panels will end at the end of 2021. While some key USD settings will continue into June 2023 to allow legacy contracts to mature, the FSB states that, “Continued reliance of global financial markets on LIBOR poses risks to global financial stability.” The FSB has ensured participants that in the upcoming months they will continue to monitor the final steps of the LIBOR transition. 

Key details covered in the statement include:

• “Significant progress has been made in transitioning to Risk-Free Rates (RFRs), but market participants still need to finalise preparations to cease new use of LIBOR by end-2021.
• Transition should be primarily to overnight RFRs, the most robust benchmarks available, to avoid reintroducing the weaknesses of LIBOR.
• Active transition of legacy contracts remains the best way for market participants to have control and certainty over their existing arrangements.”

More information on the FSB’s Statement to Support Preparations for LIBOR Cessation is available here.