About LIBOR transition

The interest rate benchmark LIBOR is being wound down. Find out why firms must take appropriate action now to transition to appropriate alternative rates.

Before end-2021, LIBOR was produced in 7 tenors (overnight/spot next, 1 week, 1-month, 2-month, 3-month, 6-month and 12-month) across 5 currencies. Each of these LIBOR settings was based on submissions provided by a panel of banks.

These submissions were intended to reflect the interest rate at which banks could borrow money on unsecured terms in wholesale markets. All LIBOR panels have now ended and the majority of their settings ceased or become permanently unrepresentative.

Following the final publication of the 3-month synthetic sterling LIBOR setting on 28 March 2024, all sterling LIBOR settings have now permanently ceased. 

The overnight and 12-month US dollar LIBOR settings ceased permanently at the end of June 2023. The 1-month, 3-month and 6-month synthetic US dollar LIBOR settings are the final remaining LIBOR settings.

We continue to require LIBOR’s administrator, ICE Benchmark Administration, to publish the 1-month, 3-month and 6-month US dollar LIBOR settings using a synthetic methodology. We expect these settings to cease permanently at the end of September 2024.

Background to LIBOR being wound down

In 2017, the FCA and the Financial Policy Committee (FPC) noted that it had become increasingly apparent that the absence of active underlying markets and the scarcity of term unsecured deposit transactions raised serious questions about the future sustainability of the LIBOR benchmarks

The LIBOR panel banks agreed to continue submitting to LIBOR until end-2021 (later extended to end-June 2023 for US dollar LIBOR only), to enable time for the market to move away from LIBOR. 

In March 2021, the FCA and ICE Benchmark Administration  (the administrator of LIBOR) announced that sterling, euro, Swiss franc and Japanese yen LIBOR panels, as well as panels for 1-week and 2-month US dollar LIBOR, will cease at end-2021, with the remaining US dollar LIBOR panels ceasing at end-June 2023. 

We confirmed our decision to use powers to use powers, which the Government granted us under the Benchmarks Regulation, to require continued publication on a changed methodology (also known as a 'synthetic') basis for the 1-month, 3-month and 6-month sterling LIBOR settings and, until end-2022, the same Japanese yen LIBOR settings. These synthetic LIBOR rates were not intended for use in new contracts, but were available for some holders of 'legacy' LIBOR-referencing contracts. 

In September 2022, we confirmed that publication of 1-month and 6-month synthetic sterling LIBOR would be required until end-March 2023, after which these settings would cease permanently.   

In November 2022, we announced that we intended to compel the publication of 3-month synthetic sterling LIBOR until end-March 2024, after which it would cease permanently. We also published a consultation  on our proposals to use our powers to require continued publication of the 1-month, 3-month, and 6-month US dollar LIBOR settings under a synthetic methodology for a temporary period until end-September 2024. 

In April 2023, we announced that we intended to compel the publication of the 1-month, 3-month and 6-month US dollar LIBOR settings under a synthetic methodology until end-September 2024 for use in all legacy contracts other than cleared derivatives. In May 2023, we published a detailed Feedback Statement setting out our response to the feedback received to our November consultation.

Parties to contracts still referencing US dollar LIBOR should be taking steps to transition to robust, appropriate reference rates, re-negotiating with counterparties where necessary. As we have said previously, we do not want to see transition to so-called 'credit sensitive' rates (CSRs) which have the potential to reintroduce many of the financial stability risks associated with LIBOR. We ask that any UK regulated market participants looking to use CSRs in UK-based business consider the risks carefully and raise with their FCA supervisors before doing so. We also expect UK regulated benchmark administrators to continue to notify us in advance if they intend to administer CSRs and make them available for use in the UK.

Transition to alternative risk-free rates

International coordination on benchmark reform

Page updates

: Information added 3-month Synthetic Sterling LIBOR has ceased.
: Editorial amendment page update as part of the website refresh
: Editorial amendment
: Information added majority of LIBOR panels have ended and their settings ceased or are permanently unrepresentative
: Information added following FS21/12 publication
: Information added confirmed our decision to use new powers for certain legacy contracts
: Information added
: Information added ISDA Protocol section.
: Information added ISDA Protocol section.