FCA Consults on Winding Down LIBOR, Issues Data Strategy Update
The Financial Conduct Authority (FCA) is seeking views on winding down the one-, three- and six-month synthetic sterling LIBOR settings, along with the information on market participants’ exposure to USD LIBOR. The feedback period to this consultation ends on August 24, 2022. Moreover FCA published a summary of the CryptoSprint events it held in May and June 2022 as well as published an update on its data strategy, which sets out the progress so far as well as the future focus areas.
Consultation on LIBOR. This consultation seeks views on progress toward completing the transition away from the one-, three- and six-month sterling LIBOR settings. Market participants have informed FCA that they would value having a period of notice before the cessation of synthetic sterling LIBOR. To ensure adequate notice, FCA is seeking views on ceasing the requirement to continue publication of the one-, three- and six-month sterling LIBOR settings at the end of March 2023, instead of at end‑December 2022. FCA is also seeking views on when it will be possible for the three-month sterling LIBOR setting to cease in an orderly fashion. The consultation also seeks information related to USD LIBOR, wherein FCA wants to understand the size and nature of the remaining exposures where transition is not already provided for either by the contract or by legislation, and market participants’ plans to transition these exposures before the end of June 2023. FCA is seeking views on any challenges or issues that might result from the publication of any USD LIBOR settings on a synthetic basis. As conveyed earlier, FCA will consider the case for requiring continued publication, on a synthetic basis, of the one-, three- and six-month USD LIBOR settings. However, FCA also clarified that market participants should not rely on a synthetic USD LIBOR rate being available after June 30, 2023. As a next step, FCA will review its decisions to compel continued publication of the one-, three- and six-month sterling LIBOR settings and notify the market of the outcome. In due course, FCA will also assess whether it should require continued publication of USD LIBOR on a synthetic basis when the US dollar LIBOR panel ends.
Data strategy update. FCA had set out its vision for the use of data and analytics at FCA in January 2020. This data strategy update sets out where the Authority has made progress, where more needs to be done, and where focus has increased. Overall, FCA has made significant progress in developing its technology, data services, and improving how it uses analytics and insights to support decision-making. So far, FCA has migrated its physical data center to a cloud-based service; developed a Data Lake to store all FCA data; implemented Analytics tools such as data visualization applications, reporting tools, and dashboards; implemented a new Decision Hub; and migrated 52,000 firms from Gabriel to the new data collection platform RegData. FCA has also put in place a "Single View" analytics tool to provide a "one stop shop" of key data and indicators about each firm and provide context for decisions on risks and where to intervene. FCA is continuing to modernize its enterprise architecture to a cloud-based system, with strengthened security and operational resiliency. FCA also plans to continue to collaborate with the Bank of England and industry to standardize how information is reported to FCA and to demonstrate how FCA can use new technology to reduce the cost of reporting with a commitment to deliver these initiatives in 2023. Another key initiative of FCA involves finding the right balance to achieving outcomes in a compliant and proportionate way, ensuring FCA meets the legal, policy, and ethical challenges to the sharing of data.
Related Links
- Consultation on LIBOR
- Consultation Paper on LIBOR (PDF)
- Data Strategy Update
- Statement on CryptoSprint Events
Keywords: Europe, UK, Banking, Securities, LIBOR, Data Strategy, Regtech, Crypto-Assets, Reporting, Basel, Benchmark Reforms, Suptech, FCA, BoE
Featured Experts
María Cañamero
Skilled market researcher; growth strategist; successful go-to-market campaign developer
Nicolas Degruson
Works with financial institutions, regulatory experts, business analysts, product managers, and software engineers to drive regulatory solutions across the globe.
Patrycja Oleksza
Applies proficiency and knowledge to regulatory capital and reporting analysis and coordinates business and product strategies in the banking technology area
Related Articles
FINMA Approves Merger of Credit Suisse and UBS
The Swiss Financial Market Supervisory Authority (FINMA) has approved the takeover of Credit Suisse by UBS.
BOE Sets Out Its Thinking on Regulatory Capital and Climate Risks
The Bank of England (BOE) published a working paper that aims to understand the climate-related disclosures of UK financial institutions.
OSFI Finalizes on Climate Risk Guideline, Issues Other Updates
The Office of the Superintendent of Financial Institutions (OSFI) is seeking comments, until May 31, 2023, on the draft guideline on culture and behavior risk, with final guideline expected by the end of 2023.
APRA Assesses Macro-Prudential Policy Settings, Issues Other Updates
The Australian Prudential Regulation Authority (APRA) published an information paper that assesses its macro-prudential policy settings aimed at promoting stability at a systemic level.
BIS Paper Examines Impact of Greenhouse Gas Emissions on Lending
BIS issued a paper that investigates the effect of the greenhouse gas, or GHG, emissions of firms on bank loans using bank–firm matched data of Japanese listed firms from 2006 to 2018.
HMT Mulls Alignment of Ring-Fencing and Resolution Regimes for Banks
The HM Treasury (HMT) is seeking evidence, until May 07, 2023, on practicalities of aligning the ring-fencing and the banking resolution regimes for banks.
BCBS Report Examines Impact of Basel III Framework for Banks
The Basel Committee on Banking Supervision (BCBS) published results of the Basel III monitoring exercise based on the June 30, 2022 data.
PRA Consults on Prudential Rules for "Simpler-Regime" Firms
Among the recent regulatory updates from UK authorities, a key development is the first-phase consultation, from the Prudential Regulation Authority (PRA), on simplifications to the prudential framework that would apply to the simpler-regime firms.
DNB Publishes Multiple Reporting Updates for Banks
DNB, the central bank of Netherlands, updated the list of additional reporting requests and published additional data quality checks and XBRL-Formula linkbase documents for the first quarter of 2023.
NBB Sets Out Climate Risk Expectations, Issues Reporting Updates
The National Bank of Belgium (NBB) published a communication on climate-related and environmental risks, issued an update on XBRL reporting
