UK Finance Guide to LIBOR Discontinuation for Banks and Lenders

On 12 February 2021, UK Finance published a guide to LIBOR discontinuation for banks and lenders (“Guide”).

The Guide provides a progress check on the LIBOR transition and identifies the actions required to meet the transition deadline at the end of 2021. The following main topics are discussed in each section: 


introduction to LIBOR discontinuation; 


introduction to new reference rates and their differences from LIBOR; 


examination of the role of working groups and regulators in the transition;


discussion on hot topics – fallbacks, tough legacy contracts ,the LIBOR currency timeline and moving new business off LIBOR; and


overview of the transition from a commercial and operational perspective. 

A useful checklist is also provided for potential next steps and transitioning smoothly away from LIBOR. Some key considerations include: 


setting up a LIBOR transition programme;


defining business strategy for transitioning legacy products and developing new risk-free rate products;


contract management, which includes identifying affected contracts and developing a remediation strategy;


developing a client outreach and communication strategy;


updating and re-validating pricing and risk management models;


ensuring system readiness;


performing impact assessments for treasury, finance and tax; and


a programme assurance to ensure that the transition project is set up and operating effectively. 

Please see the full Guide here: link