BNM Issues Financial Stability Report and Notice on LIBOR Transition
The Bank Negara Malaysia (BNM) published the financial stability review for the first half of 2021 and issued a statement on issuance of LIBOR-referencing contracts. Globally, risk-free rates will replace LIBOR for major currencies from January 2022 onward. In line with this global development, BNM requires banks to cease new issuance of LIBOR-referencing contracts by December 31, 2021 and to reference new products against alternative rates. BNM also published an e-brochure that emphasizes the urgency for bank customers to be prepared for the transition from LIBOR to risk-free rates. It advises bank customers to ensure capacity and system readiness to transact new products in the alternative rates before December 31, 2021.
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Keywords: Asia Pacific, Malaysia, Banking, LIBOR, Benchmark Reforms, Islamic Banking, Risk-Free Rates, Financial Stability, Basel, BNM
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