In November of 2019, the American Bar Association published an article title: “The Transition From LIBOR: A Report at the Halfway Mark”.
It has been more than two years since the U.K.’s Financial Conduct Authority announced that after the end of 2021, it will not compel any banks to provide quotations upon which LIBOR is based. This announcement gave the markets notice that by that date, all financial products linked to LIBOR—a reported $350 trillion worth—should be migrated to alternative reference rates. This is a mammoth transition project for the financial markets, and some progress has been made—a likely LIBOR successor for U.S. dollars has been identified, and U.S. banks have begun assessing their LIBOR exposures—but an enormous amount of work remains to be done. The transition has many moving parts, each of them presenting potential legal risk.
This article provides an overview of the effects this change has had over the last two years and what the implications are for the next two years leading up to the 2021 deadline.
This article was authored by Orrick lawyers Howard Altarescu, Nikiforos Mathews, and Andrew Morris.