IBOR Transition

New reference interest rates on Capital Markets: Our experts support you comprehensively


The UK financial regulator seals the end of LIBOR rates

The UK Financial Conduct Authority (FCA) already announced in 2017 that it will no longer guarantee the LIBOR panel after 2021.

In recent years, the FCA regularly stressed that LIBOR is hardly likely to continue after 2021. In its letter from January 2020, it set out clear milestones for reducing exposure to LIBOR and shifting it towards SONIA.

On 23 June 2020, the UK Chancellor of the Exchequer announced his intention to extend the powers of the FCA to allow a managed and orderly end to LIBOR if

  • the LIBOR panel becomes too small,
  • the FCA makes a statement of non-representativeness of LIBOR, for example, because the LIBOR panel no longer reflects the underlying market,
  • the underlying market has become too small and insignificant (in daily traded market volume) for the requirements of benchmark interest rates.

On 5 March 2021, the UK Financial Conduct Authority (FCA) announced that the LIBOR rates for the currencies CHF, EUR, GBP and JPY are no longer representative of their underlying markets as of 31 December 2021 and, hence, shall not longer be used beyond that date.

In case of USD-LIBOR, usage of LIBOR rates is permissible for legacy assets only until 30 June 2023, however only for most important tenors (i.e. overnight, 1, 3, 6 and 12 months). 1 week and 2 months tenors ceased to be published also for USD from 2022 onwards. Global Regulators have made it clear that the usage of USD-LIBOR for new business is very restricted and only permissible for very limited exceptions.

The EU Commission has issued an Implementing Regulation for CHF-LIBOR (L_2021374EN.01000101.xml (europa.eu)) that names Compounded SARON plus a tenor-specific spread adjustment as a replacement rate for the CHF-LIBOR (tenors 1, 3, 6 and 12 months).

FCA has committed the administrator ICE to publish a (non-representative) ‘synthetic’ LIBOR until further notice applying to the currencies GBP and JPY and respective legacy business.

Changes to LIBOR as of end-2021 | FCA

FCA confirms rules for legacy use of synthetic LIBOR rates and no new use of US dollar LIBOR | FCA

LIBOR / Tenor (Expected) Termination
Applies to
All LIBOR Rates
1W, 2M tenors
YE 2021
ON, 12M Tenor
YE 2021
1M, 3M, 6M Tenor
Synthetic LIBOR based on respective term rate + spread; since 04 Jan 2022 until further notice Since 04 Jan 2022, only for legacy business
ON, 1M, 3M, 6M, 12M Tenor
Termination by 30 Jun 2023
Primarily only for legacy business. According to appeals from regulators, new business in USD LIBOR is restricted to certain exceptions only.

In most cases, therefore, DZ BANK believes it is essential to actively convert and renegotiate contracts ("repapering"), as this is the only way to ensure that transactions are converted in a targeted manner that is appropriate for the customer and can be easily managed operationally.

Affected products are:

The markets are currently in flux. In some cases, no clear, uniform market standard has been established.

If you have any questions regarding the EONIA conversion, please contact your usual contacts at DZ BANK or a contact person named on the IBOR Transition page.