Regulatory Alerts2021-09-30
Supervisor of Banks Directive on Transitioning from the LIBOR Rate
The Supervisor of Banks issued a directive requiring banking corporations to systematically transition away from LIBOR rates to alternative benchmarks by December 31, 2021. Banks must cease executing new LIBOR-based contracts, implement fair fallback mechanisms in existing agreements, and proactively communicate transition details and quantitative comparisons to affected customers. The directive mandates comprehensive risk management, transparency, and customer support to mitigate legal, operational, and reputational risks associated with the benchmark change.
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