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Three-Month Dollar Libor May Win Retirement Reprieve to Mid-2023
2020-11-30 14:00:31.25 GMT

By William Shaw, Liz Capo McCormick and Craig Torres
(Bloomberg) — The administrator of dollar Libor is
considering extending key tenors on the discredited interest-
rate benchmark until the end of June 2023, according to a
statement from the Board of Governors of the Federal Reserve
System, the Federal Deposit Insurance Corporation and the Office
of the Comptroller of the Currency.
The ICE Benchmark Administration Ltd. could extend three-
month dollar Libor one-and-a-half years beyond its previously
anticipated retirement date, which had been expected at the end
of 2021. Six-month and 12-month dollar Libor could also be
extended.
The London interbank offered rate is one of the bedrocks of
the global financial system and still underpins hundreds of
trillions of dollars in financial assets. Regulators have been
seeking to phase it out after manipulation scandals and the
drying up of trading data used to inform the rate, but those
efforts have been waylaid during the coronavirus pandemic.
The IBA will consult on plans to cease publishing one-week
and two-month Libor on time, according to the statement.
“Extending the publication of certain USD Libor tenors
until June 30, 2023 would allow most legacy USD Libor contracts
to mature before Libor experiences disruptions,” they said.
A senior Federal Reserve official said the path being set
out calls for banks to stop writing new U.S. dollar Libor
contracts by the end of 2021, but allows most legacy contracts
that were written before that to mature before Libor stops.

To contact the reporters on this story:
William Shaw in London at wshaw20@bloomberg.net;
Liz Capo McCormick in New York at emccormick7@bloomberg.net;
Craig Torres in Washington at ctorres3@bloomberg.net
To contact the editors responsible for this story:
Dana El Baltaji at delbaltaji@bloomberg.net
Benjamin Purvis

To view this story in Bloomberg click here:
https://blinks.bloomberg.com/news/stories/QKM2CKT0G1KX