While most LIBOR settings have been published for the last time, work to finalize the LIBOR transition still remains. In a recent press release, the Bank of England, the Financial Conduct Authority (FCA), and the Working Group highlighted achievements in the sterling markets and outlined what must still take place, as well as how the Working Group plans to operate in the future:

• “The Bank of England, FCA and the Working Group encourage firms to continue to pursue the active transition of legacy sterling LIBOR contracts currently using the temporary synthetic LIBOR.”
• The Bank of England reports that less than 2% of total sterling LIBOR stock remains and that firms will address the residual exposure.
• Transition from US dollar LIBOR: Effective at the start of 2022 and in accordance with US supervisory guidance, the FCA is prohibiting its use for certain new contracts. UK supervised entities should have already ceased its use with limited exception. The Bank of England, FCA and the Working Group suggest using alternative rates such as SOFR. (Supervisors are continuing to monitor the progress of the transition for UK regulated entities.)
• “Continued active conversion of legacy sterling LIBOR-linked bonds and loans that are dependent on temporary synthetic LIBOR”. The Working Group touted its success in transitioning to SONIA across sterling derivative, loan and bond markets. With new objectives supported by the Bank of England, the Working Group also plans to evaluate the implications of non-sterling LIBOR transition in UK markets.

More information on the final days of the LIBOR transition can be found here.