Featured Product

    ECB Letter on Preparation of Banks for Interest Rate Benchmark Reforms

    July 03, 2019

    ECB Banking Supervision issued a letter to CEOs of significant institutions regarding the ongoing global benchmark reforms mandated by FSB. The letter is intended to seek assurance that institutions' senior managers and boards understand the risks associated with the global benchmark reforms and are taking appropriate action to ensure a smooth transition to alternative or reformed benchmark rates, ahead of the deadline of the end of 2021, as specified in the revised EU benchmarks regulation. The letter also highlights that certain changes in the methodology for relevant benchmark rates, as outlined in the letter, will be introduced as soon as October 2019.

    The letter discusses the imminent transition from the euro overnight index average (EONIA) to the new euro short-term rate (€STR) and the developments regarding the euro interbank offered rate (EURIBOR); it also covers the changes introduced for any relevant benchmark rates, in any currency, for contracts that significant institutions may be holding. ECB is committed to launching the €STR on October 02, 2019. The €STR will reflect the wholesale euro unsecured overnight borrowing costs of euro area banks. In addition, the private sector-led working group on euro risk-free rates recommended a defined transition path for EONIA. At the beginning of 2022, EONIA will be discontinued by its administrator.  In response to this letter, ECB requests the following by July 31, 2019:

    • A board-approved summary of an institution's assessment of key risks related to the benchmark reform and a detailed action plan to mitigate such risks, address pricing issues, and implement process changes
    • Contact points at the management level, who are in charge of overseeing the implementation of these action plans

    In addition, ECB is requesting a reply, by September 15, 2019, to the questionnaire containing certain quantitative and qualitative fields to help assess the significance of benchmark reform and transition for the institution.

     

    Related Link: ECB Letter (PDF)

     

    Keywords: Europe, EU, Banking, Securities, EONIA, €STR, Risk-Free Rates, Interest Rate Benchmarks, EURIBOR, Benchmarks Regulation, FSB, ECB

    Related Articles
    News

    EC Rule on Contractual Recognition of Write Down and Conversion Powers

    The European Commission (EC) published the Delegated Regulation 2021/1527 with regard to the regulatory technical standards for the contractual recognition of write down and conversion powers.

    September 17, 2021 WebPage Regulatory News
    News

    APRA Issues Further Guidance on Application of Securitization Standard

    The Australian Prudential Regulation Authority (APRA) published a new set of frequently asked questions (FAQs) to provide guidance to authorized deposit-taking institutions on the interpretation of APS 120, the prudential standard on securitization.

    September 16, 2021 WebPage Regulatory News
    News

    SRB Provides Update on Approach to Prior Permissions Regime

    The Single Resolution Board (SRB) published a Communication on the application of regulatory technical standard provisions on prior permission for reducing eligible liabilities instruments as of January 01, 2022.

    September 16, 2021 WebPage Regulatory News
    News

    APRA Publishes FAQs on Capital Treatment of Overseas Subsidiaries

    The Australian Prudential Regulation Authority (APRA) published a new set of frequently asked questions (FAQs) to clarify the regulatory capital treatment of investments in the overseas deposit-taking and insurance subsidiaries.

    September 15, 2021 WebPage Regulatory News
    News

    EBA Finalizes Guidance to Assess Breaches of Large Exposure Limits

    The European Banking Authority (EBA) published the final report on the guidelines specifying the criteria to assess the exceptional cases when institutions exceed the large exposure limits and the time and measures needed for institutions to return to compliance.

    September 15, 2021 WebPage Regulatory News
    News

    PRA Finalizes Changes to Consolidated Prudential Rules Under CRD5/CRR2

    The Prudential Regulation Authority (PRA) issued the policy statement PS20/21, which contains final rules for the application of existing consolidated prudential requirements to financial holding companies and mixed financial holding companies.

    September 15, 2021 WebPage Regulatory News
    News

    EBA Revises Guidelines on Stress Tests of Deposit Guarantee Schemes

    The European Banking Authority (EBA) revised the guidelines on stress tests to be conducted by the national deposit guarantee schemes under the Deposit Guarantee Schemes Directive (DGSD).

    September 15, 2021 WebPage Regulatory News
    News

    Nordea Bank and EIB Sign Agreement to Fund Green Projects in Nordics

    The European Commission (EC) announced that Nordea Bank has signed a guarantee agreement with the European Investment Bank (EIB) Group to support the sustainable transformation of businesses in the Nordics.

    September 15, 2021 WebPage Regulatory News
    News

    HKMA Endorses Industry Guidance to Support LIBOR Transition

    The Hong Kong Monetary Authority (HKMA) issued a circular, for all authorized institutions, to confirm its support of an information note that sets out various options available in the loan market for replacing USD LIBOR with the Secured Overnight Financing Rate (SOFR).

    September 14, 2021 WebPage Regulatory News
    News

    OCC Issues Booklet on Supervision of Problem Banks

    The Office of the Comptroller of the Currency (OCC) issued a new "Problem Bank Supervision" booklet of the Comptroller's Handbook. The booklet covers information on timely identification and rehabilitation of problem banks and their advanced supervision, enforcement, and resolution when conditions warrant.

    September 13, 2021 WebPage Regulatory News
    RESULTS 1 - 10 OF 7481