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Release of "Second Public Consultation on the Appropriate Choice and Usage of Japanese Yen Interest Rate Benchmarks" (the Cross-Industry Committee on Japanese Yen Interest Rate Benchmarks)

August 7, 2020
Financial Markets Department
Bank of Japan

The Cross-Industry Committee on Japanese Yen Interest Rate Benchmarks, today, released a public consultation on interest rate benchmark reform "Second Public Consultation on the Appropriate Choice and Usage of Japanese Yen Interest Rate Benchmarks -- Considering the developments since the publication of the final report on the results of the last public consultation --" [PDF 832KB] .

Since 2014, efforts have been made on interest rate benchmark reform based on the recommendation by the Financial Stability Board (FSB) to promote the usage of interest rate benchmarks in ways suited to the characteristics of financial instruments and financial transactions. However, since concerns about the sustainability of LIBOR beyond the end of 2021 have rapidly heightened, recent discussions have been centering on preparations for the discontinuation of LIBOR.

In July 2019, the Cross-Industry Committee on Japanese Yen Interest Rate Benchmarks launched the first public consultation on the basic approach toward the appropriate choice and usage of Japanese yen (JPY) interest rate benchmarks in order to deliberate on the preparation for the permanent discontinuation of LIBOR after the end of 2021. The Committee published the results of the public consultation in November 2019. Since then, the Committee has deliberated on practical issues considering the results of the public consultation as well as discussions in the banking and securities industries and global developments.

The purpose of this public consultation is to present the results of the Committee's deliberations and to solicit comments from a wide range of market participants on specific matters to be dealt with when fallbacks are triggered in cash products referencing JPY LIBOR. In addition, this public consultation paper contains both the outcome of the deliberations in the Committee for enhancing the robustness of Term Reference Rates and a transition plan for cash products referencing JPY LIBOR maturing beyond the end-2021, with a time frame. For details including related materials, please refer to the "Cross-Industry Committee on Japanese Yen Interest Rate Benchmarks" page of the Bank of Japan's website.

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Market Infrastructure Division, Financial Markets Department

E-mail : post.fmd33@boj.or.jp