Featured Product

    BOJ Deputy Governor Speaks on Interest Rate Benchmark Reform in Japan

    February 19, 2020

    The Deputy Governor of BOJ Masayoshi Amamiya spoke in Tokyo about how Japan should proceed with interest rate benchmark reform over the next two years until the end of 2021, when the discontinuation of LIBOR is expected. He focused on initiatives by individual companies, initiatives by the entire market, and the role of the public sector in Japan.

    Mr. Amamiya mentioned that the users of interest rate benchmarks, such as financial institutions, institutional investors, and non-financial corporates, are required to change their LIBOR-based operations and organizational structures to a framework based on alternative benchmarks. It is necessary to not only simply examine the exposure of LIBOR-based transactions but also how LIBOR is used in various areas, including accounting and risk management. In addition, it will be required to establish a governance framework, including specific section focusing on the transition to alternative benchmarks, and secure internal resources, including staff and budgets, while the extent of the preparation may differ from one institution to another.

    He highlighted that it is important to promote market-wide initiatives, including the establishment of alternative benchmarks to LIBOR and the development of market practices, to encourage individual actions by market participants and interest rate benchmark users. For the Japanese yen, there is a great deal of support for the term reference rate to be used as an alternative benchmark to JPY LIBOR. As a first step, the entity is going to start publishing "prototype rates," which do not presume use in actual transactions. Through the publication of prototype rates, it is expected that the entire market will transition smoothly from JPY LIBOR to the term reference rate, as individual steps are taken to prepare for transactions using that alternative benchmark. Following that, the aim is to publish "production rates" of the term reference rate no later than mid-2021, with an assumption that these will be used in actual transactions.

    The Deputy Governor said that in relation to the initiatives by individual companies and the entire market, it is important for the public sector to have the perspective of ensuring the formation of fair prices and the stability of financial transactions in financial markets, both before and after the discontinuation of LIBOR. It is very important for both the private and public sectors to keep in mind the timeline of when the discontinuation of LIBOR is expected—that is, up to the end of 2021. To accomplish the interest rate benchmark reform by also utilizing the results of past deliberations, it is necessary for all relevant parties in the private and public sectors to steadily implement measures while appropriately cooperating with each other by keeping in mind the limited time until the end of 2021.

     

    Related Link: Speech

     

    Keywords: Asia Pacific, Japan, Banking, Securities, Interest Rate Benchmarks, LIBOR, Benchmark Reforms, IBOR Reform, BOJ, BIS

    Featured Experts
    Related Articles
    News

    EBA Publishes Final Regulatory Standards on STS Securitizations

    The European Banking Authority (EBA) published the final draft regulatory technical standards specifying and, where relevant, calibrating the minimum performance-related triggers for simple.

    September 20, 2022 WebPage Regulatory News
    News

    ECB Further Reviews Costs and Benefits Associated with IReF

    The European Central Bank (ECB) is undertaking the integrated reporting framework (IReF) project to integrate statistical requirements for banks into a standardized reporting framework that would be applicable across the euro area and adopted by authorities in other EU member states.

    September 15, 2022 WebPage Regulatory News
    News

    EBA Publishes Funding Plans Report, Receives EMAS Certification

    The European Banking Authority (EBA) has been awarded the top European Standard for its environmental performance under the European Eco-Management and Audit Scheme (EMAS).

    September 15, 2022 WebPage Regulatory News
    News

    MAS Launches SaaS Solution to Simplify Listed Entity ESG Disclosures

    The Monetary Authority of Singapore (MAS) set out the Financial Services Industry Transformation Map 2025 and, in collaboration with the SGX Group, launched ESGenome.

    September 15, 2022 WebPage Regulatory News
    News

    BCBS to Finalize Crypto Rules by End-2022; US to Propose Basel 3 Rules

    The Basel Committee on Banking Supervision met, shortly after a gathering of the Group of Central Bank Governors and Heads of Supervision (GHOS), the oversight body of BCBS.

    September 15, 2022 WebPage Regulatory News
    News

    IOSCO Welcomes Work on Sustainability-Related Corporate Reporting

    The International Organization of Securities Commissions (IOSCO) welcomed the work of the international audit and assurance standard setters—the International Auditing and Assurance Standards Board (IAASB)

    September 15, 2022 WebPage Regulatory News
    News

    BoE Allows One-Day Delay in Statistical Data Submissions by Banks

    The Bank of England (BoE) published a Statistical Notice (2022/18), which informs that due to the Bank Holiday granted for Her Majesty Queen Elizabeth II’s State Funeral on Monday September 19, 2022.

    September 14, 2022 WebPage Regulatory News
    News

    ACPR Amends Reporting Module Timelines Under EBA Framework 3.2

    The French Prudential Control and Resolution Authority (ACPR) announced that the European Banking Authority (EBA) has updated its filing rules and the implementation dates for certain modules of the EBA reporting framework 3.2.

    September 14, 2022 WebPage Regulatory News
    News

    ECB Paper Discusses Disclosure of Climate Risks by Credit Agencies

    The European Central Bank (ECB) published a paper that examines how credit rating agencies accepted by the Eurosystem, as part of the Eurosystem Credit Assessment Framework (ECAF)

    September 13, 2022 WebPage Regulatory News
    News

    APRA to Modernize Prudential Architecture, Reduces Liquidity Facility

    The Australian Prudential Regulation Authority (APRA) announced reduction in the aggregate Committed Liquidity Facility (CLF) for authorized deposit-taking entities to ~USD 33 billion on September 01, 2022.

    September 12, 2022 WebPage Regulatory News
    RESULTS 1 - 10 OF 8514