UK regulators are said to be considering the impact of the coronavirus outbreak on the London Interbank Offered Rate (LIBOR) transition deadline of end of 2021, according to reports.
Bloomberg reported that the Financial Conduct Authority (FCA), the Bank of England and the Risk Free Rate Working Group "are assessing the likely impacts of coronavirus on transition progress to meet that deadline".
The reference rate, which is used as a benchmark for around $350trn worth of financial products, will cease to exist after the end of 2021, but the FCA has said firms "must transition to alternative rates before this date".
International Swaps and Derivatives Association chief executive Scott O'Malia said in an update published on its website that coronavirus is having an impact on deadlines and obligations, but that "the initiative to transition from LIBOR and adopt risk-free rates isn't like other deadlines".
O'Malia added: "Specifically, whether LIBOR ends at the end of 2021 is dependent on whether banks continue making submissions after this date.
"The UK Financial Conduct Authority has made it clear that it does not intend to compel banks to submit after 2021, so ISDA is working on the basis that the various major benchmark reform milestones still have to be met."
According to Bloomberg, James Lewis, a director and co-lead on LIBOR at KPMG UK, speaking about the BoE said it will "need a little more wiggle room".
Lewis added: "This isn't like the last financial crisis, it's potentially going to touch all businesses and economies and they're going to have to be sensitive to that."
In February, the FCA urged asset management firms to "act now" and to take "proactive steps" to ensure that the end of LIBOR "does not lead to markets being disrupted or harm to consumers".
Investment Week reported in September last year that fund managers have been slow to replace LIBOR-linked benchmarks on their fund products, with around 90% of asset managers saying they use it as a benchmark for at least one fund.
The decision to phase out LIBOR came after a series of scandals and the Risk Free Rate Working Group has recommended the Sterling Overnight Index Average (SONIA) as its proposed alternative benchmark.