Regulatory Alerts2021-12-10
Banking Circular No. 6 of 2021 - Guidance on Libor Transition
The Central Bank of Kenya has issued a circular on the transition away from the London Interbank Offered Rate (LIBOR) following the Financial Conduct Authority's announcement that it will cease to be provided by any administrator. As such, all LIBOR settings will either cease or no longer be representative after December 31st, 2021 for Sterling, Euro, Swiss Franc and Japanese Yen settings, along with the 1-week and 2-month US Dollar settings, and by June 30th, 2023 for remaining US Dollar settings. The transition away from LIBOR will affect banks' operations, prompting the Central Bank of Kenya to develop a Guidance on LIBOR Transition focused on governance, monitoring, communication, training, risks, mitigations, systems changes, testing and preparedness. Institutions are required to submit information to CBK on a monthly basis until the transition is fully completed in 2023.