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Banker Resource Center

London Interbank Offered Rate (LIBOR) Transition

The transition away from LIBOR as a reference rate benchmark poses financial, legal, operational, and consumer protection risks for institutions with exposure. Exposure is generally measured as the size of any activity and the number of counterparties or consumers with financial contracts that reference LIBOR across all products. It is important that institutions with LIBOR exposure have appropriate risk management processes in place to identify and mitigate transition risks.

Laws and Regulations

Key laws and regulations that pertain to FDIC-supervised institutions; note that other laws and regulations also may apply.

Supervisory Resources

Frequently asked questions, advisories, statements of policy, and other information issued by the FDIC alone, or on an interagency basis, provided to promote safe-and-sound operations.

  • Joint Statement on Completing the LIBOR Transition issued on April 26, 2023, reminds supervised institutions that U.S. dollar (USD) London Inter-Bank Offered Rate (LIBOR) panels will end on June 30, 2023 and reiterates that institutions with USD LIBOR exposure should complete their transition of remaining LIBOR contracts as soon as practicable. As noted in prior interagency statements, failure to adequately prepare for LIBOR's discontinuance could undermine financial stability and institutions' safety and soundness and create litigation, operational, and consumer protection risks.
  • Joint Statement on Managing the LIBOR Transition issued October 20, 2021, emphasizes the expectation that supervised institutions with LIBOR exposure continue to progress toward an orderly transition away from LIBOR, includes clarification regarding new LIBOR contracts, considerations when assessing appropriateness of alternative reference rates, and expectations for fallback language
  • Answers to Frequently Asked Questions about the Impact of LIBOR Transitions on Regulatory Capital Instruments (Issued July 29, 2021)
  • Joint Statement on LIBOR Transition issued November 30, 2020, encourages banks to cease entering into new contracts that use USD LIBOR as a reference rate as soon as practicable and in any event by December 31, 2021
  • Joint Statement on Reference Rates for Loans issued November 6, 2020, reminds institutions that the federal banking agencies are not endorsing a specific replacement rate for LIBOR for loans and of the importance of robust fallback language in loan contracts
  • Joint Statement on Managing the LIBOR Transition issued July 1, 2020, highlights potential risks that may result from the expected discontinuation of LIBOR and its use as a reference rate, and encourages institutions to continue preparing for the transition
  • Consumer Financial Protection Bureau LIBOR Transition Resources issued December 7, 2021, includes resources to help industry understand, implement, and comply with regulatory requirements when transitioning from the LIBOR index, including the LIBOR Transition Rule in Regulation Z.

Other Resources

Supplemental information and guidance related to safe and sound banking operations.

Videos/Webcasts/Teleconferences

Informational videos and recordings of prior webcasts and teleconferences.

Last Updated: July 24, 2024