The 2017 announcement by the chief executive of the Financial Conduct Authority (FCA) that the FCA will no longer compel panel banks to submit London Interbank Offered Rate (LIBOR) quotations after 2021 was a shock to the credit and derivative markets. While market participants around the world have come to terms with the expected cessation of LIBOR and other interbank offered rates (IBORs), there remains significant uncertainty around the transition to new benchmark rates, the determination and calculation of those benchmark rates, the impact the transition away from LIBOR and other IBORs will have on existing and future financing arrangements, as well as potential legal, conduct, regulatory, and economic risks.
The end of LIBOR and other IBORs present challenges for financial institutions, direct lenders and other alternative credit providers, asset managers, corporates, including small businesses and retail customers, as an estimated $200-$300 trillion in assets are tied to USD LIBOR alone across a range of variable-rate asset classes, including mortgages, student loans, auto loans, corporate loans and bonds, and derivatives.
Jones Day lawyers are engaged in nearly every region and practice area in a coordinated effort to assist clients in preparing for the cessation of IBORs around the world. Jones Day's LIBOR Insights are developed with a global perspective to identify critical issues and provide practical information on a near-real time basis as market participants prepare for and navigate the transition away from LIBOR and other IBORs.