Regulatory Alerts2020-04-23
Added · Updated
Reform of interest rate benchmarks
The Hong Kong Monetary Authority reports that Hong Kong banks hold significant LIBOR and HIBOR exposures, with substantial volumes maturing after 2021 lacking adequate fallback provisions. The document outlines key industry challenges, including the absence of standardized fallback language, low liquidity for alternative reference rates, and significant IT and model adjustments required for transition. It further details global developments in benchmark reform, such as transition roadmaps from the UK and US, the development of fallback protocols by ISDA, and the growing issuance of products referencing alternative reference rates.
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