FCA, BoE, and members of the Working Group on Sterling Risk-Free Reference Rates have discussed the impact of the COVID-19 on firms’ LIBOR transition plans over the coming months. The central assumption that firms cannot rely on LIBOR being published after the end of 2021 has not changed and it should remain the target date for all firms to meet. Additionally, BoE published minutes of the SONIA Stakeholder Advisory Group meeting, which was held in February 2020. The Advisory Group supports BoE’s administration of SONIA by providing advice and technical input to BoE and the SONIA Oversight Committee. The Group noted that the withdrawal of UK from EU on January 31, 2020 had no impact on market functioning.
The transition from LIBOR remains an essential task that will strengthen the global financial system. Many preparations for transition will be able to continue. There has, however, been an impact on the timing of some aspects of the transition programs of many firms. Particularly in segments of the UK market that have made less progress in transition and are, therefore, still more reliant on LIBOR, such as the loan market, it is likely to affect some of the interim transition milestones. Alongside other international authorities, BoE, FCA, and the Working Group will continue to monitor and assess the impact on transition timelines and will update the market as soon as possible.
Keywords: Europe, UK, Banking, Securities, LIBOR, COVID-19, Transition Date, SONIA, Risk-free Rates, FCA, BoE
Leading economist; commercial real estate; performance forecasting, econometric infrastructure; data modeling; credit risk modeling; portfolio assessment; custom commercial real estate analysis; thought leader.
EBA published a report analyzing the impact of the unwind mechanism of the liquidity coverage ratio (LCR) for a sample of European banks over a three-year period, from the end of 2016 to the first quarter of 2020.
In response to questions from a member of the European Parliament, the ECB President Christine Lagarde issued a letter clarifying the possibility of amending the AnaCredit Regulation and making targeted longer-term refinancing operations (TLTROs) dependent on the climate-related impact of bank loans.
IASB started the post-implementation review of the classification and measurement requirements in IFRS 9 on financial instruments and added the review as a project to its work plan.
FSB published a report that examines progress in implementing policy measures to enhance the resolvability of systemically important financial institutions.
EBA published a report on the benchmarking of national loan enforcement frameworks across 27 EU member states, in response to the call for advice from EC.
FSB published a letter from its Chair Randal K. Quarles, along with two reports exploring various aspects of the market turmoil resulting from the COVID-19 event.
RBNZ launched a consultation on the details for implementing the final Capital Review decisions announced in December 2019.
The Trustees of the IFRS Foundation, which are responsible for the governance and oversight of IASB, have announced the appointment of Dr. Andreas Barckow as the IASB Chair, effective July 2021.
HKMA issued a letter to consult the banking industry on a full set of proposed draft amendments to the Banking (Capital) Rules for implementing the Basel standard on capital requirements for banks’ equity investments in funds in Hong Kong.
ESRB published an opinion assessing the decision of Swedish Financial Supervisory Authority (FSA) to extend the application period of a stricter measure for residential mortgage lending, in accordance with Article 458 of the Capital Requirements Regulation (CRR).