Featured Product

    ISDA Summarizes Results of Consultation on Benchmark Fallbacks

    August 09, 2019

    ISDA published a statement summarizing the preliminary results of a consultation on pre-cessation issues for LIBOR and certain other interbank offered rates (IBORs). The consultation on pre-cessation issues, which was launched in May, sought comments on how derivatives contracts should address a regulatory announcement that LIBOR or certain other IBORs categorized as critical benchmarks under the EU Benchmarks Regulation are no longer representative of an underlying market. Additionally, ISDA announced that Bloomberg Index Services Limited (BISL) has been selected to calculate and publish adjustments related to fallbacks that ISDA intends to implement for certain interest rate benchmarks in its 2006 ISDA Definitions.

    ISDA received responses from 89 entities to the consultation from a variety of market participants including banks and broker-dealers, insurance companies, asset managers, government or federal entities, and central counterparties (CCPs). Respondents expressed a wide variety of views on whether and how to implement a pre-cessation trigger related to “non-representativeness” for derivatives. Respondents also expressed a number of issues for consideration related to the potential pre-cessation trigger and how to implement such a trigger.

    In September 2019, ISDA hopes to publish an aggregated summary of the feedback received. ISDA also hopes to consult on a proposed documentation solution for derivatives to allow for efficient incorporation of a pre-cessation fallback trigger in a manner that attempts to account for, and mitigate against, the concerns expressed by respondents to the recent consultation (to the extent such concerns can be addressed by documentation for derivatives). The consultation period for the proposed solution of ISDA will allow market participants to indicate whether the proposal addresses their concerns and to raise any additional concerns they may have. Meanwhile, ISDA will continue to work with market participants and regulators to determine how best to address concerns regarding “non-representative” benchmarks and implementation of pre-cessation fallbacks for derivatives. ISDA will continue to seek advice from its independent advisors and feedback from government and regulatory agencies.

     

    Related Links

    Keywords: International, Banking, Securities, IBOR, Interest Rate Benchmarks, Risk-Free Rates, LIBOR, BISL, ISDA

    Related Articles
    News

    APRA Issues Interim Update to Policy Priorities for 2021 and Beyond

    In a letter addressed to the industry, the Australian Prudential Regulation Authority (APRA) set out an updated schedule of policy priorities for the banking, insurance, and superannuation industries.

    September 24, 2021 WebPage Regulatory News
    News

    EC Adopts Solvency II and Resolution Rules Package for Insurers

    The European Commission (EC) adopted a comprehensive review package of Solvency II rules in the European Union.

    September 22, 2021 WebPage Regulatory News
    News

    OCC Issues Booklets on Regulatory Reporting and Earnings

    The Office of the Comptroller of the Currency (OCC) issued Versions 1.0 of the "Earnings" and "Regulatory Reporting" booklets of the Comptroller's Handbook.

    September 22, 2021 WebPage Regulatory News
    News

    ECB Sets Out Results of Economy-Wide Climate Stress Tests

    The European Central Bank (ECB) published results of its economy-wide climate stress test, which aimed to assess the resilience of non-financial corporates and euro area banks to climate risks.

    September 22, 2021 WebPage Regulatory News
    News

    EBA Examines Implications of Increasing Use of Digital Platforms in EU

    The European Banking Authority (EBA) published a report on the use of digital platforms in the banking and payments sector in European Union.

    September 21, 2021 WebPage Regulatory News
    News

    HKMA Issues Updates on Policy Measures Intended to Ease COVID Impact

    The Hong Kong Monetary Authority (HKMA) published updates on the policy measures that were announced in context of the ongoing pandemic.

    September 21, 2021 WebPage Regulatory News
    News

    ISDA Responds to BCBS Proposal on Treatment of Cryptoasset Exposures

    The International Swaps and Derivatives Association (ISDA), along with several other associations, submitted a joint response to the Basel Committee on Banking Supervision (BCBS) consultation on preliminary proposals for the prudential treatment of cryptoasset exposures.

    September 21, 2021 WebPage Regulatory News
    News

    BIS Quarterly Review Discusses Developments in Fintech and ESG Space

    BIS published the September issue of the Quarterly Review, which contains special features that analyze the rapid rise in equity funding for financial technology firms, the effectiveness of policy measures in response to pandemic, and the evolution of international banking.

    September 20, 2021 WebPage Regulatory News
    News

    BCBS to Consult on Supervisory Practices for Climate Risks by Year-End

    The Basel Committee for Banking Supervision (BCBS) met in September 2021 and reviewed climate-related financial risks, discussed impact of digitalization, and welcomed efforts by the International Financial Reporting Standards (IFRS) Foundation to develop a common set of sustainability reporting standards

    September 20, 2021 WebPage Regulatory News
    News

    OCC Identifies Operational Risk Deficiencies in MUFG Union Bank

    The Office of the Comptroller of the Currency (OCC) issued a Cease and Desist Order against MUFG Union Bank for deficiencies in technology and operational risk governance.

    September 20, 2021 WebPage Regulatory News
    RESULTS 1 - 10 OF 7494