FILE PHOTO: People wearing masks walk past the Bank of England, as the spread of the coronavirus disease continues, in London, Britain, March 23, 2020. REUTERS/Toby Melville
“This has reinforced the importance of completing the transition to alternative rates by end-2021,” the BoE said in its interim Financial Stability Report on Thursday. The benchmark is being ditched after banks were fined billions of dollars for trying to rig the rate, and for sterling-denominated contracts it is being replaced by the BoE’s overnight Sonia rate.The proportion of transactions in quotes that banks submit has risen above 10% only once over the past year, with the clear majority of inputs based on “expert judgement”, the FSR said.
“So while there may be a need for short-term reprioritisation, market participants should remain focused on the continued importance of removing reliance on Libor by the end of 2021,” the FSR said.
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