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

    HKMA Announces Liquidity Measures in Response to COVID-19 Outbreak

    HKMA issued a circular on liquidity measures that HKMA has taken or plans to take in response to COVID-19 outbreak.

    April 03, 2020 WebPage Regulatory News
    News

    BaFin Lowers Countercyclical Capital Buffer Amid COVID-19 Outbreak

    BaFin published a general order to lower the countercyclical capital buffer (CCyB) from 0.25% to 0% as of April 01, 2020.

    April 03, 2020 WebPage Regulatory News
    News

    ESMA Updates Risk Assessment in Light of COVID-19

    ESMA updated its risk assessment to account for the impact of the COVID-19 pandemic.

    April 02, 2020 WebPage Regulatory News
    News

    FSB Outlines and Reprioritizes Its Work to Address COVID-19 Risks

    FSB published a statement that outlines its work toward addressing the financial stability risks posed by COVID-19, along with the reprioritization of its work program for 2020.

    April 02, 2020 WebPage Regulatory News
    News

    EIOPA Announces Measures to Address the Impact of COVID-19

    Due to the outbreak of COVID-19, EIOPA is re-prioritizing and alleviating the burden by extending the deadlines or delaying projects where input from national competent authorities and/or industry is foreseen.

    April 02, 2020 WebPage Regulatory News
    News

    EBA Guidelines on Use of Payment Moratoria to Address Liquidity Issues

    EBA published detailed guidance on the treatment of legislative and non-legislative moratoria on loan repayments to be applied before June 30, 2020, in light of the COVID-19 crisis.

    April 02, 2020 WebPage Regulatory News
    News

    PRA Outlines Approach to Reporting and Disclosures Amid COVID-19

    PRA published a statement to outline its approach to regulatory reporting and Pillar 3 disclosures for UK banks, building societies, designated investment firms, and credit unions.

    April 02, 2020 WebPage Regulatory News
    News

    PRA Finalizes Certain Modeling Issues for Solvency II Internal Models

    PRA published a statement (PS9/20) that sets out the final policy on modeling of income-producing real estate loans and internal credit assessment for illiquid, unrated assets within the Solvency II internal models.

    April 02, 2020 WebPage Regulatory News
    News

    EIOPA Issues Statement on Mitigating Impact of COVID-19 Outbreak

    EIOPA issued a statement to insurers and intermediaries, urging them to take steps to mitigate the impact of COVID-19 on consumers.

    April 01, 2020 WebPage Regulatory News
    News

    APRA on Changes to Reporting Obligations for Banks Due to COVID-19

    APRA, in collaboration with the Reserve Bank of Australia (RBA) and the Australian Bureau of Statistics (ABS), published a letter outlining temporary changes in reporting obligations for authorized deposit-taking institutions and registered financial corporations, in response to COVID-19.

    April 01, 2020 WebPage Regulatory News
    RESULTS 1 - 10 OF 4936