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UK watchdog sets deadline on Libor interest rate swaps

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By Reuters

LONDON (Reuters) – Britain’s Financial Conduct Authority said on Thursday that it wants banks to stop offering Libor-based interest rate swap contracts from the first quarter of next year.

The FCA has said that compilation of the tarnished Libor interest rate benchmark is expected to cease at the end of 2021 and be replaced by Sonia, a rate compiled by the Bank of England.

“In sterling interest rate swap markets, we will be encouraging market makers to make Sonia the market convention from Q1 2020,” said Edwin Schooling-Latter, the FCA’s director of markets and wholesale policy.

(Reporting by Huw Jones)