As the end of 2021 rapidly approaches, market participants are preparing for the cessation or loss of representatives of the majority of LIBOR settings on December 31, 2021. IQ convened a group of senior policy-makers and chairs of two industry working groups to discuss the key challenges that lie ahead as LIBOR is retired.

“Through synthetic LIBOR, we’ve extended the runway for those firms that might otherwise have struggled to get the whole of their legacy LIBOR fleet down to a smooth landing on solid RFR-based land by the end of 2021. But there’s no long-term parking on this runway.”

Edwin Schooling Latter
Director of markets and wholesale policy, UK Financial Conduct Authority

“As an industry, we have been making good progress in our efforts to transition actively from EONIA to €STR in a way that ensures continuity and economic certainty on those contracts for market participants.”

James von Moltke
Chief financial officer, Deutsche Bank; chair, Working Group on Euro Risk-free Rates

“At the end of this year, new use of US dollar LIBOR will come to a stop. When approaching a stop sign, every good driver knows to slow down. Waiting until the last moment and then slamming on the brakes risks a major accident.”

Nathaniel Wuerffel
Head of domestic markets, markets group, Federal Reserve Bank of New York

“The SOFR First initiative was a key step toward supercharging growth in SOFR derivatives trading, and we continue to see strong progress on that front. Liquidity in SOFR has increased to the point where it is as good or better than liquidity in LIBOR.”

Tom Wipf
Vice chairman of institutional securities, Morgan Stanley; chair, Alternative Reference Rates Committee

“The end of 2021 is not the end of the journey. The transition of legacy contracts that reference US dollar LIBOR – of which a majority of settings will cease only after end-June 2023 – will be another challenge as we enter 2022.”

Arthur Yuen
Deputy chief executive, Hong Kong Monetary Authority

To read the full roundtable, click on the PDF below.