FCA warns asset managers: 'Act now' on LIBOR

Ceases to function at the end of 2021

Asset management firms must "act now" and take "immediate action" to shed themselves of exposure to LIBOR-linked investments and benchmarks before the rate ceases to exist at the end of 2021, the Financial Conduct Authority (FCA) has warned.

In a 'Dear CEO' letter published this morning (27 February), the FCA's head of asset management supervision Nick Miller told firms they are responsible for taking "proactive steps" and building transition plans, ensuring that the end of LIBOR "does not lead to markets being disrupted or harm to consumers". The London Interbank Offered Rate (LIBOR) is currently the world's most widely-used reference rate, providing a benchmark for about $350trn worth of financial products. However, a big shake-up is looming as bank traders were found to have been manipulating LIBOR in the wake of the G...