ICE LIBOR Administrator Sets Out Transition Plan For New Submission Methodology

On April 25, 2018, ICE Benchmark Administration, the administrator of the LIBOR benchmark, published a report setting out how it proposes to transition panel banks to the new "Waterfall Methodology" outlined in its ICE LIBOR Output Statement, which was updated following a feedback statement in March 2017 on the evolution of the London Interbank Offered Rate. LIBOR is a widely used benchmark for short-term interest rates. It is produced for five currencies and seven tenors, resulting in the publication of 35 rates every applicable London business day.

The ICE LIBOR Output Statement sets out a single LIBOR definition and a more standardized, transaction data-driven methodology for LIBOR panel banks' submissions. IBA's intention in introducing the new methodology is to publish, in all market circumstances, a wholesale funding rate anchored in unsecured, wholesale funding transactions to the greatest extent possible.