LIBOR’s last throes

The scandal-ridden interest rate benchmark ceases from much of its legal usage at the end of December 2021, but some interim arrangements as well as various litigation risks pertaining to the transition will linger a few more years. Johnny Shearman explains.

Johnny Shearman is head of knowledge and legal services at Signature Litigation, and is a recommended lawyer in The Legal 500 2022 for banking litigation: investment and retail. Contact him on johnny.shearman@signaturelitigation.com.

Time is running out for the London Interbank Offered Rate as we know it. At the end of this year, LIBOR will cease and will no longer be representative for all but the most commonly-used USD LIBOR tenors – USD LIBOR will continue through to the end of 2023. While efforts have been made to ensure a smooth transition away from the troubled interest rate benchmark, there are still concerns as to how legacy contracts will operate and how a diverging approach across key jurisdictions will play out.