FCA encourages firms to transition from synthetic LIBOR to permanent and robust alternatives

<img width="562" height="339" src="https://www.leaprate.com/wp-content/uploads/2020/07/FCA-regulation.jpg" class="webfeedsFeaturedVisual wp-post-image" alt="FCA regulation" style="float: left; margin-right: 5px;" link_thumbnail="" srcset="https://www.leaprate.com/wp-content/uploads/2020/07/FCA-regulation.jpg 730w, https://www.leaprate.com/wp-content/uploads/2020/07/FCA-regulation-230×138.jpg 230w, https://www.leaprate.com/wp-content/uploads/2020/07/FCA-regulation-380×228.jpg 380w, https://www.leaprate.com/wp-content/uploads/2020/07/FCA-regulation-88×53.jpg 88w, https://www.leaprate.com/wp-content/uploads/2020/07/FCA-regulation-245×148.jpg 245w, https://www.leaprate.com/wp-content/uploads/2020/07/FCA-regulation-500×301.jpg 500w" sizes="(max-width: 562px) 100vw, 562px" /><p>SONIA is the most used alternative to LIBOR in the UK. Since 2018, Its floating rate note issuance in cash markets surpassed £120 billion. New SONIA lending has exceeded £100 billion in a diverse range of sectors.</p>
<p>The Bank of England estimates that less than 2% of the total sterling LIBOR legacy stock remains and notes still remained, and firms are already addressing this residual exposure.</p>
<p>The UK agency will consider retaining 1-month and 6-month synthetic sterling LIBOR at the end of 2022 and will also decide on when to end the 3-month sterling synthetic LIBOR.</p>
<p>Andrew Bailey, the Bank of England Governor, said:</p>
<blockquote><p>It is difficult to think of a more far-reaching and substantial market shift in recent years than the transition away from LIBOR. The fact that most LIBOR settings ended at end-2021 with minimal disruption is a testament to the co-operation across a wide range of industry sectors and jurisdictions.</p></blockquote>
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