The London Interbank Offered Rate or Libor is used in contracts worth around $400 trillion globally, but it is due to be phased out by the end of 2021.

Replacing the 50-year old Libor with rates compiled by central banks by the end of 2021 is one of the biggest tasks markets have faced.

Rich Fox, head of markets policy at Britain's Financial Conduct Authority (FCA), said a call from banks and markets for global coordination in phasing out Libor was being heard "loud and clear".

"This year you will really start to see the needle move," Fox told a conference organised by global derivatives body ISDA.

In Britain, the use of Libor in pricing new futures contracts should end in March, the FCA has said. Referencing Libor in new loans should cease by the end of September.

Fox met with representatives of the Alternative Reference Rates Committee, or ARRC, an U.S. industry group convened by the New York Federal Reserve. They were keen to copy the UK approach of using a string of deadlines leading to 2021, Fox said.

"I would expect the ARRC to come out with some date-specific targets that should really focus minds," Fox said

Britain has a head start, since the Bank of England's Sonia overnight rate, which is replacing Libor, has long been familiar to markets. The United States is starting from scratch with the Fed's Sofr rate, Fox said.

Markets should do all they can to reduce the number of existing contracts that reference Libor so that the pile of "tough" legacy contracts is as small as possible, Fox said.

Banks in Britain have already been told by the FCA to come up with plans showing how they are ending the use of Libor.

"Nobody can rely on a magic wand coming to solve this problem for you," Fox said.

By Huw Jones