September 14, 2023 - Bloomberg Index Services Limited (BISL) has released a consultation proposing to cease publication of Bloomberg Short-term Bank Yield Index (BSBY). BSBY has been available since March 2021 and was designed as a cost of funding benchmark for lending markets. Before the availability of Term SOFR, BSBY, a term rate, was considered as a potential benchmark replacement for LIBOR. However, since then Term SOFR has become the leading benchmark replacement in lending markets.
BISL’s consultation is available here. The consultation review period will close on October 13th. Importantly, the BISL release clarified that it was not a statement of cessation but a proposal of cessation. Market participants will be provided at least 12 months advance written notice of any cessation of BSBY.