EU, ECB, EBA, ESMA Statement on forthcoming cessation of all LIBOR settings (25 June 2021) - CONSOB AND ITS ACTIVITIES
Statement of the European Commission, the European Central Bank in its banking supervisory capacity (ECB Banking Supervision), the European Banking Authority (EBA) and the European Securities and Markets Authority (ESMA) on forthcoming cessation of all LIBOR settings (25 June 2021)
In view of the imminent cessation of LIBOR publication, the European Commission, the European Central Bank in its banking supervisory capacity (ECB Banking Supervision), the European Banking Authority (EBA) and the European Securities and Markets Authority (ESMA) strongly encourage market participants to substantially reduce their exposure to USD LIBOR, GBP LIBOR, JPY LIBOR, CHF LIBOR and EUR LIBOR.
In order to achieve this result, the following actions are strongly encouraged:
- stop using the 35 LIBOR settings, including USD LIBOR, as a reference rate in new contracts as soon as practicable and in any event by 31 December 2021;
- limit the use of any LIBOR setting published under a changed methodology (also known as "synthetic" LIBOR) only to contracts that are particularly difficult to amend ahead of LIBOR cessation (commonly referred to as "tough legacy"); and
- include robust fallback clauses nominating alternative rates in all contracts referencing LIBOR.