Featured Product

    JFSA Issues Updates on Liquidity Risk FAQs and LIBOR Transition

    November 29, 2021

    The Financial Services Agency of Japan (JFSA) updated the frequently asked questions (FAQ) in relation to the liquidity ratio requirements based on introduction of fund-supplying operations to support financing for climate change responses. The updates mainly allow for collateral pledged by financial institutions to the Bank of Japan (BOJ) to be treated as an exception to the net stable funding ratio (NSFR) requirements, when using the fund-supplying operations to support the private sector's climate change-initiatives/responses (as applied to other non-standard funds-supplying operations). JFSA also requested that the relevant financial institutions facilitate financing for small- and medium-size enterprises during the calendar- or fiscal-year-end season and further beyond; this is because businesses are still facing difficult cash flow conditions with tight borrowing constraints amid COVID-19 pandemic. Additionally, the Cross-Industry Committee on Japanese Yen Interest Rate Benchmarks published the final report on results of the public consultation on the treatment of tough legacy contracts in Japan.

    The consultation on the treatment of tough legacy contracts took place from September 28 to October 19, 2021. Most of the responses to the items subject to public comments in the consultation paper were in support of the Committee's views and were mainly complementary. In response to the feedback received, the Committee is revisiting its views regarding the concept of contracts that could consider using synthetic yen LIBOR as tough legacy contracts and the points to note when using synthetic yen LIBOR between contracting parties. In consideration of the final report, BOJ and JFSA have sent a joint letter to financial institutions on transition away from JPY LIBOR. The letter highlights that it is necessary for each financial institution to take further actions to transition in the remaining period, as not all existing contracts requiring LIBOR transition have been completed and there are still risks and uncertainties that transition will not be completed by the end of this year. BOJ and JFSA will continue to monitor the progress of existing contracts referencing JPY LIBOR for which transition has not yet been completed, including conducting a third survey on the use of LIBOR as of the end of December 2021, and require financial institutions to take necessary actions in light of the situation. From January 2022, BOJ and JFSA will monitor financial institutions on their use of synthetic yen LIBOR and their engagement with customers when using synthetic yen LIBOR, as necessary. Based on the monitoring results, JFSA will mull on the appropriate supervisory measures.


    Keywords: Asia Pacific, Japan, Banking, Securities, FAQ, Basel, Climate Change Risk, ESG, NSFR, SMEs, Credit Risk, LIBOR Transition, Interest Rate Benchmarks, Benchmark Reforms, Synthetic LIBOR, Legacy Contracts, Liquidity Risk, JFSA, BOJ

    Featured Experts
    Related Articles

    EBA Sets Out Roadmap for 2023, Updates Reporting Framework 3.2

    The European Banking Authority (EBA) published its work program for 2023 as well as the technical package for phase 3 of version 3.2 of its reporting framework.

    September 30, 2022 WebPage Regulatory News

    FED Announces Launch of Climate Scenario Analysis Exercise in 2023

    The Board of Governors of the Federal Reserve System (FED) announced a pilot climate scenario analysis exercise for six largest banks in the U.S.

    September 29, 2022 WebPage Regulatory News

    BIS Paper Studies Impact of Fintech Lending on Small Businesses in US

    The Bank for International Settlements (BIS) published a paper that studies impact of fintech lending on credit access for small businesses in U.S.

    September 26, 2022 WebPage Regulatory News

    UK Regulators Issue CRR Changes and Stress Test Scenarios for Banks

    The Prudential Regulation Authority (PRA) issued the policy statement PS8/22 to amend the Own Funds and Eligible Liabilities (CRR) Part of the PRA Rulebook and update the supervisory statement SS7/13 titled "Definition of capital (CRR firms).

    September 26, 2022 WebPage Regulatory News

    EBA Launches EU-Wide Transparency Exercise in 2022

    The European Banking Authority (EBA) launched the EU-wide transparency exercise for 2022, with results of the exercise expected to be published at the beginning of December, along with the annual Risk Assessment Report.

    September 23, 2022 WebPage Regulatory News

    SRB on CRR Quick-Fix to Policy for Multiple Point of Entry Banks

    The Single Resolution Board (SRB) welcomed the adoption of the review of the Capital Requirements Regulation, or CRR, also known as the "CRR quick-fix."

    September 22, 2022 WebPage Regulatory News

    EC Rule Lists Advanced Economies for Market Risk Capital Calculations

    The European Commission (EC) recently adopted the Delegated Regulation 2022/1622, which sets out the regulatory technical standards to specify the countries that constitute advanced economies for the purpose of specifying risk-weights for the sensitivities to equity.

    September 21, 2022 WebPage Regulatory News

    EBA Publishes Final Regulatory Standards on STS Securitizations

    The European Banking Authority (EBA) published the final draft regulatory technical standards specifying and, where relevant, calibrating the minimum performance-related triggers for simple.

    September 20, 2022 WebPage Regulatory News

    ECB Further Reviews Costs and Benefits Associated with IReF

    The European Central Bank (ECB) is undertaking the integrated reporting framework (IReF) project to integrate statistical requirements for banks into a standardized reporting framework that would be applicable across the euro area and adopted by authorities in other EU member states.

    September 15, 2022 WebPage Regulatory News

    EBA Publishes Funding Plans Report, Receives EMAS Certification

    The European Banking Authority (EBA) has been awarded the top European Standard for its environmental performance under the European Eco-Management and Audit Scheme (EMAS).

    September 15, 2022 WebPage Regulatory News
    RESULTS 1 - 10 OF 8523