OCC on Self-Assessment Tool for Banks to Assess LIBOR Transition Plan
OCC published a bulletin that provides a self-assessment tool for banks to evaluate their preparedness for the expected cessation of London Inter Bank Offered Rate (LIBOR). The self-assessment tool can be used to assess the appropriateness of LIBOR transition plan of a bank, bank management’s execution of the transition plan, and related oversight and reporting. This bulletin applies to community banks, but the applicability of some concepts depends on the nature and extent of the LIBOR exposure of a bank.
LIBOR is referenced globally and its expected cessation could affect banks of all sizes through direct or indirect exposure. Banks should develop and implement risk management plans to identify and control risks related to the expected LIBOR cessation. Bank management may use this self-assessment tool to evaluate bank risk management processes to identify and mitigate the LIBOR transition risks. Not all sections or questions apply to all banks. Bank management should tailor the risk management process of bank to the size and complexity of the bank’s LIBOR exposures. Bank management should consider all applicable risks (such as operational, compliance, strategic, and reputation) when scoping and completing the LIBOR cessation preparedness assessments. Given the expectation for banks to cease entering into new contracts that use LIBOR as a reference rate by December 31, 2021, bank management should assess whether the bank’s progress with preparedness is sufficient.
Related Links
Keywords: Americas, US, Banking, LIBOR, LIBOR Transition, Interest Rate Benchmark, Self-Assessment Tool, OCC
Previous Article
FED Updates Forms and Instructions for FR Y-14 Data CollectionRelated Articles
BIS Quarterly Review Discusses Developments in Fintech and ESG Space
BIS published the September issue of the Quarterly Review, which contains special features that analyze the rapid rise in equity funding for financial technology firms, the effectiveness of policy measures in response to pandemic, and the evolution of international banking.
BCBS to Consult on Supervisory Practices for Climate Risks by Year-End
The Basel Committee for Banking Supervision (BCBS) met in September 2021 and reviewed climate-related financial risks, discussed impact of digitalization, and welcomed efforts by the International Financial Reporting Standards (IFRS) Foundation to develop a common set of sustainability reporting standards
OCC Identifies Operational Risk Deficiencies in MUFG Union Bank
The Office of the Comptroller of the Currency (OCC) issued a Cease and Desist Order against MUFG Union Bank for deficiencies in technology and operational risk governance.
EC Rule on Contractual Recognition of Write Down and Conversion Powers
The European Commission (EC) published the Delegated Regulation 2021/1527 with regard to the regulatory technical standards for the contractual recognition of write down and conversion powers.
ECB to Consider Climate Risks When Reviewing Collateral Framework
In a response to the questions posed by a member of the European Parliament, the President Christine Lagarde highlighted the commitment of the European Central Bank (ECB) to an ambitious climate-related action plan along with a roadmap, which was published in July 2021.
SRB Provides Update on Approach to Prior Permissions Regime
The Single Resolution Board (SRB) published a Communication on the application of regulatory technical standard provisions on prior permission for reducing eligible liabilities instruments as of January 01, 2022.
APRA Issues Further Guidance on Application of Securitization Standard
The Australian Prudential Regulation Authority (APRA) published a new set of frequently asked questions (FAQs) to provide guidance to authorized deposit-taking institutions on the interpretation of APS 120, the prudential standard on securitization.
ACPR Publishes Corrective Version of RUBA Taxonomy
The French Prudential Control and Resolution Authority (ACPR) published the corrective version of the RUBA taxonomy Version 1.0.1, which will come into force from the decree of January 31, 2022.
Nordea Bank and EIB Sign Agreement to Fund Green Projects in Nordics
The European Commission (EC) announced that Nordea Bank has signed a guarantee agreement with the European Investment Bank (EIB) Group to support the sustainable transformation of businesses in the Nordics.
APRA Publishes FAQs on Capital Treatment of Overseas Subsidiaries
The Australian Prudential Regulation Authority (APRA) published a new set of frequently asked questions (FAQs) to clarify the regulatory capital treatment of investments in the overseas deposit-taking and insurance subsidiaries.
