Emma RadmoreThe Bank of England has updated its website on the transition from LIBOR, and what it is doing to catalyse using SONIA as the primary interest rate benchmark in sterling markets.
The Working Group on Sterling Risk-Free Reference Rates wants lenders to be ready, by the end of September, to offer non-LIBOR products to customers and to work with them so that there are clear contractual arrangements for converting all LIBOR-linked products to SONIA or other alternatives before the end of 2021.
By the end of 2021, there should be no more issuance of sterling LIBOR-linked loans expiring after the end of the year.
The working group notes the adjustments that have been made because of the pandemic but says the market volatility during the pandemic period has clearly shown LIBOR’s weaknesses, so the importance of transitioning ahead of the end of 2021 remains unchanged. It has published a number of papers to help firms.