Dear CEO letter to firms on preparations for transition from LIBOR

The FCA and PRA have published a joint ‘Dear CEO’ letter sent to major banks and insurers supervised in the UK regarding the preparations and actions they have taken to manage the transition from the London Interbank Offered Rate (LIBOR) to alternative risk-free rates (RFRs).

The purpose of the letters is to seek assurance that firms’ senior managers and Boards understand the risks associated with this transition and are taking appropriate action so that firms can transition to alternative rates ahead of the end of 2021.

The FCA and PRA have requested that firms send them a board-approved summary of their assessment of key risks relating to LIBOR discontinuation and details of the actions that firms intend to take to mitigate those risks by 14 December 2018.