BOT Working Group Charts Out Plan to Address LIBOR Cessation Issues
Representatives of the Association of the Bank of Thailand and the Association of international banks have established a working group to prepare for the cessation of London Interbank Offered Rate (LIBOR). BOT held a working group meeting to discuss ways to prepare for the cessation of LIBOR. The group emphasized the importance of communication and raising awareness among Thai financial market participants. By March 2020, the working group expects to finalize guidelines for various issues related to the preparations toward LIBOR cessation.
To keep the market participants informed, the working group will publish progress report, along with conclusions about various issues; this information will be made available on the website of BOT. To make the transition as smooth and fair as possible for all parties, the working group has resolved to take actions in three key areas:
- Modify the text In financial contracts that reference LIBOR and THBFIX such as loan agreements, derivative contracts, or the terms and conditions of debt instruments
- Prepare commercial banks to support the changing of LIBOR
- Set interest rate to compensate in case of cessation of LIBOR and set direction of the reference interest rate of Thailand
In the meantime, the working group asks market participants that have financial transactions based on the LIBOR or THBFIX interest rate to expedite the exploration of existing transaction or contract volumes. It may consult with commercial banks or counterparties in advance go adjust existing contracts in a timely manner and to assess the initial impact in various areas. The end of the use of LIBOR by 2021 will directly affect financial transactions that reference LIBOR interest rates and indirectly affect certain other types of transactions related to THBFIX, which has a financial market in Thailand.
Related Link (in Thai): News Release
Keywords: Asia Pacific, Thailand, Banking, LIBOR, THBFIX, Interest Rate Benchmarks, BOT
Previous Article
BOT Publishes Reporting Documents for Financial Data Set and TFRS 9Related Articles
EBA Finalizes Remuneration Standards for Investment Firms in EU
EBA finalized the two sets of draft regulatory technical standards on the identification of material risk-takers and on the classes of instruments used for remuneration under the Investment Firms Directive (IFD).
ECA Recommends Actions to Enhance Resolution Planning for Banks
EC published, in the Official Journal of the European Union, a notification that the European Court of Auditors (ECA) has published a special report on resolution planning in the Single Resolution Mechanism.
BoE Publishes Key Elements of the 2021 Stress Testing for Banks in UK
BoE published a scenario against which it will be stress testing banks in 2021, in addition to setting out the key elements of the 2021 stress test, guidance on the 2021 stress test, and the variable paths for the 2021 stress test.
PRA Proposes Rules on Identity Verification of Depositor Protection
PRA published a consultation paper (CP3/21) proposes rules regarding the timing of identity verification required for eligibility of depositor protection under the Financial Services Compensation Scheme (FSCS).
FSB Publishes Work Program for 2021
FSB published the work program for 2021, which reflects a strategic shift in priorities in the COVID-19 environment.
FCA Issues Update on Move to New Data Collection Platform
FCA announced that 50% firms have started using the new data collection platform RegData, which is slated to replace the existing platform known Gabriel.
Bundesbank Publishes Derivation Rules for Reporting by Banks
Bundesbank published Version 5.0 of the derivation rules for completeness check at the form level, with respect to the data quality of the European harmonized reporting system.
FED Revises Capital Planning and Stress Testing Requirements for Banks
FED finalized a rule that updates capital planning requirements to reflect the new framework from 2019 that sorts large banks into categories, with requirements that are tailored to the risks of each category.
ECB Releases Results of Bank Lending Survey for Fourth Quarter of 2020
ECB published results of the quarterly lending survey conducted on 143 banks in the euro area.
ESAs Publish Reporting Templates for Financial Conglomerates
ESAs published the final draft implementing technical standards on reporting of intra-group transactions and risk concentration of financial conglomerates subject to the supplementary supervision in EU.
