Bank of England and plans to discontinue Libor
September 20, 2018

The Bank of England's Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA) have written to the Chief Executive Officers of the largest banks and insurance companies in their jurisdiction in the UK.

In letters sent yesterday (19 September) they asked for details of the preparations and actions they are taking to manage transition away from using London interbank offered rate (Libor) and into alternative interest rate benchmarks.

The aim is to seek assurance that the senior managers and boards of directors (a) understand the risks associated with this transition and (b) that they are taking appropriate action now so that firms can transition to alternative rates before the end of 2021.

Firms which have not received a direct email from their supervision team linking to the letters do not within the scope of the request, but all firms that currently rely on Libor are nevertheless being encouraged to read them and reflect on them.

The participation and commitment of all market participants to address the various challenges during the transition will be an essential part of the success of this collective effort, the letter said.

Replies are requested by December 14, when the PRA and FCA expect to see a board-approved summary of the assessment of key risks relating to Libor discontinuation and the details of actions planned to mitigate the risks.





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The Bank of England's Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA) have written to the Chief Executive Officers of the largest banks and insurance companies in their jurisdiction in the UK.

In letters sent yesterday (19 September) they asked for details of the preparations and actions they are taking to manage transition away from using London interbank offered rate (Libor) and into alternative interest rate benchmarks.

The aim is to seek assurance that the senior managers and boards of directors (a) understand the risks associated with this transition and (b) that they are taking appropriate action now so that firms can transition to alternative rates before the end of 2021.

Firms which have not received a direct email from their supervision team linking to the letters do not within the scope of the request, but all firms that currently rely on Libor are nevertheless being encouraged to read them and reflect on them.

The participation and commitment of all market participants to address the various challenges during the transition will be an essential part of the success of this collective effort, the letter said.

Replies are requested by December 14, when the PRA and FCA expect to see a board-approved summary of the assessment of key risks relating to Libor discontinuation and the details of actions planned to mitigate the risks.



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