FCA Issues Timeline to Cease LIBOR Benchmark

The Financial Conduct Authority (FCA) Financial Conduct Authority (FCA) The Financial Conduct Authority (FCA) is the largest financial regulator for all financial markets in the United Kingdom (UK).The UK regulator is responsible for the conduct of firms authorized under the Financial Services and Markets Act 2000. Moreover, the FCA is also responsible for the regulation of behavior in retail and wholesale financial markets, supervision of the trading infrastructure that supports those markets, and the prudential regulation of firms not regulated by the PRA. Its rol The Financial Conduct Authority (FCA) is the largest financial regulator for all financial markets in the United Kingdom (UK).The UK regulator is responsible for the conduct of firms authorized under the Financial Services and Markets Act 2000. Moreover, the FCA is also responsible for the regulation of behavior in retail and wholesale financial markets, supervision of the trading infrastructure that supports those markets, and the prudential regulation of firms not regulated by the PRA. Its rol Read this Term) is officially ending the controversial LIBOR benchmark for most of the currencies, a decision that came after an industry consultation in December led by the ICE Benchmark Administration.

The FCA, which oversees the global benchmark, announced on Friday that the publication of LIBOR will cease after December 31, 2021, for the pound sterling, euro, Swiss franc, Japanese yen and for the one-week and two-month US dollar settings.

The rest of the US dollar settings will cease on 30 June 2023. According to the regulator, these timelines will ensure a smooth transition of the cessation of the benchmark.

“Today’s announcements provide certainty on when the LIBOR panels will end,” FCA CEO, Nikhil Rathi said in a statement. “Publication of most of the LIBOR benchmarks will cease at the same time as the panels end. Market participants must now complete their transition plans.”

The Scandalous FX Benchmark

The reputation of LIBOR, which measures the cost of unsecured borrowing between banks, was tainted by the manipulation of its rates done by several banks. Many traders were charged and penalized for their role in this mass Forex Forex Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Read this Term market rigging.

Though global authorities were pushing banks, asset managers and other market participants will stop using the FX benchmark, the recent regulatory decision finally cleared the conundrum over the benchmark of a nearly dead market.

“Today’s announcements mark the final chapter in the process that began in 2017, to remove reliance on unsustainable LIBOR rates and build a more robust foundation for the financial system. With limited time remaining, my message to firms is clear – act now and complete your transition by the end of 2021,” said Andrew Bailey, Governor of Bank of England.