1489313 - Hogan Lovells FIS Horizons 2021 update - Flipbook - Page 35
Financial Institutions Horizons
The UK government’s approach is markedly
different in nature to that being actively pursued
in Europe where the European Commission
is proposing a statutory override to LIBOR
references in legacy contracts. A more limited
statutory override has also been under discussion
in New York. The UK government acknowledges in
its policy statement that “as the home jurisdiction
of LIBOR’s administrator, the UK has a distinct
role to play in minimizing financial stability risks
and disruption to financial systems from LIBOR
wind-down in the UK and globally. Alongside the
FCA and the Bank of England, the government
stands ready to work with our international
partners to coordinate respective legislative and
regulatory approaches to support an orderly
global wind-down of LIBOR.”
It is to be hoped that such coordination will result
in a coherent international response to deal with
the tough legacy issue.
What is clear is that firms should not rely on the
future availability of any legislation which will only
likely apply in narrow circumstances and should
retain control of the economics of their returns on
their investments and continue to take every step to
actively transition their legacy books in good time
before the end of next year. As Edwin Schooling
Latter, Director, Markets and Wholesale Policy
at the FCA said: “the only way for contractual
counterparties to have certainty and control over
the future of their obligations is to convert them by
mutual agreement.”
This is a fast moving area. The positions described
in this piece are correct as at 9 November 2020.
Please get in touch with your usual Hogan Lovells
contact or any of the contacts named in this piece if
you would like to discuss any of the issues raised in
this piece further.
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Authors:
Susan Whitehead
Senior Consultant, London
T +44 20 7296 2635
susan.whitehead@hoganlovells.com
Charlotte Bonsch
Knowledge Lawyer, Paris
T +33 1 53 67 47 47
charlotte.bonsch@hoganlovells.com
Hali Katz
Knowledge Lawyer, New York
T +1 212 918 3681
hali.katz@hoganlovells.com
Michelle Rich
Regional Head of Knowledge
Hong Kong
T +852 2840 5616
michelle.rich@hoganlovells.com
Isobel Wright
Counsel Knowledge Lawyer, London
T +44 20 7296 2610
isobel.wright@hoganlovells.com
