On 16 October 2020 the Financial Stability Board (FSB) published a global transition roadmap for LIBOR. The FSB coordinates at the international level the work of national financial authorities and international standard-setting bodies and brings together national authorities responsible for financial stability in 24 countries and jurisdictions.
The roadmap informs firms with exposure to LIBOR of some of the steps they should be taking between now and the end of 2021 to mitigate the risks posed by continued reliance on LIBOR. The steps include the following:
- Firms should have already identified and assessed all existing LIBOR exposures and agreed on a project plan to transition in advance of end-2021.
- By the effective date of the ISDA Fallbacks Protocol, the FSB strongly encourages firms to have adhered to the Protocol.
- By the end of 2020, firms should be in a position to offer non-LIBOR linked loans to their customers.
- By mid-2021, firms should have established formalised plans to amend legacy contracts where this can be done and have implemented the necessary system and process changes to enable transition to robust alternative rates.
- By end-2021, firms should be prepared for LIBOR to cease.
The FSB also flags that as benchmark transitions vary across currency regions and legislation and other actions to promote transition are taking different paths in different jurisdictions, firms with exposure to LIBOR benchmarks should also monitor developments with regard to other IBORs relevant to their business.