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Key Dollar Libor Rates Get 18Month Stay of Execution

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WASHINGTONLONDONNEW YORK, Nov 30 Reuters The United States will get more time than the rest of the world to ditch Libor after American banks agreed to help compile the tarnished interest rate benchmark until mid2023, regulators announced on Monday.

ICE Benchmark Administration IBA, which takes quotes from a panel of banks to compile different Libor tenors across a range of currencies, said it would consult on ceasing publication of oneweek and twomonth U.S. dollar Libor by the end of 2021.

All remaining Libor tenors, which are more heavily used, will cease after the end of June 2023, IBA said in a statement.

Extending the publication of some dollar Libor tenors to June 2023 would allow most legacy or outstanding contracts to mature before Libor experiences disruptions, U.S. regulatory agencies said in a statement on Monday.

The regulators said the new 2023 deadline only applies to existing Libor contracts and that markets should stop using Libor as soon as practicable. No new Libor contracts will be allowed after 2021.

Given consumer protection, litigation, and reputation risks, the agencies believe entering into new contracts that use USD Libor as a reference rate after December 31, 2021, would create safety and soundness risks and will examine bank practices accordingly, the U.S. regulators said.

The Alternative Reference Rates Committee ARRC, an industry group convened by the Federal Reserve, in a published statement said the extension of some contracts would…

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