FSB Issues Progress Report on Reforming Major Interest Rate Benchmarks
FSB published a progress report on the implementation of its recommendations to reform major interest rate benchmarks. The report sets out the progress made on the development of overnight nearly risk-free rates (RFRs) and markets based on these rates; it also assesses progress on further reforms to interbank offered rates (IBORs). FSB will publish the next progress report in late 2019.
The progress report considers three key areas:
-
IBORs. Although the London Interbank Offered Rate (LIBOR) has been strengthened, authorities have warned that publication of LIBOR may cease once official sector support for the benchmark is withdrawn at the end of 2021. Work has continued among the other major IBORs (EURIBOR and TIBOR) to strengthen the existing methodologies to make them more grounded in actual transactions as well as to strengthen regulatory frameworks and supervision.
-
Alternative reference rates. In the markets facing the disappearance of IBORs, notably markets currently reliant on LIBOR, there needs to be an orderly transition to new reference rates that are sufficiently robust for such extensive use. Since the 2017 progress report, a great deal of progress has been made to identify RFRs and other alternative reference rates in the currency areas that are currently reliant on LIBOR benchmarks. Progress has also been made to plan for, and in some markets, begin to execute the transition to those RFRs.
-
Enhancing contractual robustness. Significant work continues on the part of FSB member authorities, national working groups, ISDA, and other trade associations on the important task of strengthening contractual robustness to the risk of discontinuation of major interest-rate benchmarks. This issue goes beyond derivatives markets and applies to many types of cash products, including syndicated loans, bonds, and mortgages.
FSB started its work on the reforms to IBORs, in response to the cases of attempted manipulation and to the decline in liquidity in key interbank unsecured funding markets. In 2014, FSB set out recommendations to reform major interest rate benchmarks, such as key IBORs, and has been monitoring progress on the implementation since then.
Related Links
Keywords: International, Banking, RFR, LIBOR, Reference Rates, Interest Rate Benchmarks, IBOR, FSB
Previous Article
FSB Welcomes IAIS Proposal on Systemic Risk Framework for InsurersRelated Articles
|
News
FSB to Evaluate Effects of Too-Big-To-Fail Reforms for Systemic BanksFSB is seeking feedback as part of its evaluation of the effects of the too-big-to-fail reforms for banks.
May 23, 2019
WebPage
Regulatory News
|
|
News
APRA Releases Minor Changes to Reporting Standards on SA-CCR for BanksAPRA released minor changes to the three reporting standards for the standardized approach for measuring counterparty credit risk exposures (SA-CCR).
May 22, 2019
WebPage
Regulatory News
|
|
News
APRA on Industry Self-Assessments into Governance and AccountabilityAPRA released an information paper analyzing the self-assessments performed by 36 of the country’s largest banks, insurers, and superannuation licensees in response to the final report on the Prudential Inquiry into the Commonwealth Bank of Australia (CBA).
May 22, 2019
WebPage
Regulatory News
|
|
News
PRA Consults on Maintenance of TMTP Under Solvency IIPRA published a consultation paper (CP11/19) that sets out its approach to update supervisory statement (SS6/16) on maintenance of the transitional measure on technical provisions (TMTP) under Solvency II.
May 22, 2019
WebPage
Regulatory News
|
|
News
APRA Proposes to Amend Guidance on Residential Mortgage LendingAPRA is consulting on revisions to the prudential practice guide APG 223 on residential mortgage lending in Australia.
May 21, 2019
WebPage
Regulatory News
|
|
News
IASB Proposes Improvements to IFRS 9 and IFRS 16IASB published the exposure draft ED 2019/2 that proposes amendments to four IFRS standards, including IFRS 9 on Financial Instruments and IFRS 16 on Leases.
May 21, 2019
WebPage
Regulatory News
|
|
News
Denis Beau of BDF on Supervisory Priorities for Climate-Change RisksDenis Beau, the First Deputy Governor of BDF, delivered opening remarks at the BCBS-BSCEE-FSI High-level Meeting for Europe on banking supervision.
May 21, 2019
WebPage
Regulatory News
|
|
News
ISDA CDM to be Deployed for UK Digital Regulatory Reporting PilotISDA announced deployment of the ISDA Common Domain Model (ISDA CDM 2.0) to support the UK FCA, BoE, and participating financial institutions in testing phase two of the Digital Regulatory Reporting pilot for derivatives.
May 21, 2019
WebPage
Regulatory News
|
|
News
MAS to Consolidate Regulation of Merchant Banks Under Banking ActMAS published a consultation paper that proposes to consolidate the regulation of merchant banks under the Banking Act and to move merchant banks to a licensing regime under the MAS Act.
May 21, 2019
WebPage
Regulatory News
|
|
News
ESAs Amend Technical Standards on Mapping of ECAIs Under CRRESAs published a second amendment to the implementing technical standards on the mapping of credit assessments of External Credit Assessment Institutions (ECAIs) for credit risk under the Capital Requirements Regulation (CRR).
May 20, 2019
WebPage
Regulatory News
|
