Libor Transition: The Final Leg Of The Marathon

Since Andrew Bailey, then CEO of the UK's Financial Conduct Authority (FCA), fired the starting gun in July 2017, regulators and market participants around the world have been planning for the end of LIBOR, which will now occur in less than 10 weeks. For many, this is the final leg of a marathon that has included many legal, economic, and operational hurdles. For others, this will be an all-out sprint to the finish line. This article lays out some of the many considerations to meet the challenge of transitioning legacy contracts away from US dollar Libor.

What will happen to LIBOR after June 30?

Before discussing what happens to legacy contracts that reference Libor, we must first understand what will happen to Libor itself. Libor is administered by ICE Benchmark Administrator (IBA), which is regulated by the FCA. LIBOR has historically been compiled by IBA on the basis of a panel of banks providing quotes that are intended to be representative of interest rate