FCA has announced that the US dollar LIBOR bank panel will finish on June 30th, 2023. This is the only LIBOR panel still in existence.
The United States dollar LIBOR settings for time periods of one night, one month, three months, and twelve months have been stopped. Furthermore, the one-month, three-month, and six-month US dollar LIBOR settings are designated as Article 23A benchmarks and will be published in a synthetic form.
Starting today, the rate for these loans will be determined using an artificial system. This system takes into consideration the CME Term SOFR Reference Rate and the specific ISDA fixed spread adjustment. Nevertheless, these settings are no longer accurate reflections of the markets they used to evaluate. We expect them to end at the end of September 2024, the same as we mentioned in April.
The use of synthetic US dollar LIBOR is now banned under the Benchmarks Law. All top clearing firms have replaced all their cleared derivative contracts that mentioned US dollar LIBOR, by secure rates. Nearly all non-cleared derivative contracts mentioning US dollar LIBOR will also start to be based on protected charges as of today, due to the voluntary fallback language adopted through the ISDA Protocol. This Protocol is still available for any other company who wants to join.
Firms must make sure they are ready for the synthetic LIBOR settings to stop at the end of September 2024.
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