It's Beginning To Look Like A SONIA Spring

The London Inter-Bank Offered Rate (LIBOR) has three decades' worth of roots deeply planted in financial markets, however, reforms following the global financial crisis prompted the United Kingdom (U.K.) Financial Conduct Authority (FCA) - tasked with overseeing LIBOR administration - to raise questions about the future sustainability of LIBOR. In response, regulators across the globe have identified alternative reference rates that are compliant with the standards issued by the International Organization of Securities Commission. Global regulators have indicated they expect LIBOR to be phased out by 2021 year's end. In July 2020, the Bank of England (BoE), FCA, and the Bank of England Working Group on Sterling Risk-Free Reference Rates (the Working Group) published priorities lists and a 2020 LIBOR transition roadmap.¹ The roadmap encouraged financiers to switch the convention for sterling interest rates swaps to the Sterling Overnight Index Average (SONIA) Rate on