Featured Product

    BoE Paper on Risk Management Approach of Collateral Referencing LIBOR

    June 27, 2019

    BoE published a discussion paper that seeks initial feedback on the BoE approach to the risk management of collateral that references the London Interbank Offered Rate (LIBOR); this approach is positioned at BoE for use in its market operations, as sterling and other markets transition away from LIBOR toward the alternative risk‐free reference rates. Comments are requested by September 27, 2019.

    The paper provides a brief background to both the LIBOR transition process and the collateral framework of BoE and describes their potential implications for the BoE balance sheet from LIBOR transition. In the UK, BoE and FCA are working with market participants through the Working Group on Sterling Risk‐Free Reference Rates to catalyze a transition to using the Sterling Overnight Index Average (SONIA) as the primary interest rate benchmark in sterling markets. Against this backdrop, BoE has initiated a review of its own exposures, or potential exposures, to LIBOR. One key area of investigation has been the collateral that banks and other financial firms are asked to provide when borrowing from BoE under the Sterling Monetary Framework.

    The paper also outlines a number of possible risk management approaches that are under consideration by BoE to ensure that it remains well-placed to provide liquidity insurance in support of financial stability. It further poses some questions for discussion. Views on these questions are sought, both from firms that are signed up (or expect to sign up) to the Sterling Monetary Framework and from any other interested parties. Responses will be used to help frame the future risk management approach of BoE with regard to the collateral referencing LIBOR. The assessment of collateral eligibility criteria and haircuts needed to protect public money are not normally informed by input from market participants. However, in this case, the unusually wide ramifications of LIBOR transition and the need to plan well ahead means that BoE sees merit in seeking views at a relatively early stage in the process.

     

    Related Links

    Comment Due Date: September 27, 2019

    Keywords: Europe, UK, Banking, Securities, LIBOR, Collateral Referencing, Risk Management Approach, SONIA, Risk-Free Rates, Interest Rate Benchmarks, BoE

    Related Articles
    News

    FASB Proposes Improvements to Derivatives and Hedging Standard

    FASB proposed an Accounting Standards Update, on codification improvements to hedge accounting under Topic 815, to clarify certain sections of the 2017 hedge accounting standard (Update 2017-12).

    November 13, 2019 WebPage Regulatory News
    News

    FASB Approves Guidance to Assist in Transition to New Reference Rates

    FASB approved an Accounting Standards Update (Topic 848) to provide temporary, optional guidance to ease the potential burden in accounting for, or recognizing the effects of, the reference rate reform on financial reporting.

    November 13, 2019 WebPage Regulatory News
    News

    BIS and MAS Launch Innovation Hub in Singapore

    BIS and MAS launched the BIS Innovation Hub Center in Singapore.

    November 13, 2019 WebPage Regulatory News
    News

    MAS Collaborates on Research Platform to Support Fintech Investments

    MAS, Deloitte, and S&P Global Market Intelligence have collaborated to develop a prototype for an industry-wide Fintech Research Platform to help investors and financial institutions connect with fintech start-ups that they can partner with or invest in.

    November 12, 2019 WebPage Regulatory News
    News

    MAS and CSA Sign Agreement to Strengthen Collaboration in Fintech

    MAS and eight members of the Canadian Securities Administrators (CSA) signed a cooperation agreement to strengthen collaboration in fintech between Singapore and CSA’s member jurisdictions.

    November 12, 2019 WebPage Regulatory News
    News

    APRA Consults to Standardize Submission Date for Quarterly Reporting

    APRA proposed to standardize quarterly reporting due dates for authorized deposit-taking institutions. The proposed standardized due date is 35 calendar days after the last day of the reference quarter, which will create a 14-calendar-day extension for credit unions and building societies.

    November 08, 2019 WebPage Regulatory News
    News

    EBA Single Rulebook Q&A: First Update for November 2019

    EBA updated the Single Rulebook question and answer (Q&A) tool with answers to two questions. The answers provide clarifications on topics related to own funds and strong customer authentication under the revised Payment Services Directive or PSD2.

    November 08, 2019 WebPage Regulatory News
    News

    FED Proposes to Extend Initial Compliance Dates Under SCCL Rule

    FED published a proposal to extend, by 18 months, the initial compliance dates for foreign banks subject to the single-counterparty credit limit (SCCL) rule.

    November 08, 2019 WebPage Regulatory News
    News

    EBA Publishes Technical Package on Reporting Framework 2.9.1

    EBA published a new release of the reporting framework 2.9.1. This release includes validation rules, Data Point Model (DPM) data dictionary, XBRL taxonomy, and other supporting documents. Additionally, the release fixes some modeling issues on COREP Liquidity and FINREP.

    November 08, 2019 WebPage Regulatory News
    News

    EBA Report Examines Progress in Addressing Nonperforming Loans in EU

    EBA published a report that examines the progress toward addressing the nonperforming loan (NPL) issue in Europe.

    November 08, 2019 WebPage Regulatory News
    RESULTS 1 - 10 OF 4131