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Response to the announcement on the end date of LIBOR panel publication and the announcement on the intention to consult on the publication of synthetic yen LIBOR


March 8, 2021
Bank of Japan

On March 5, 2021, ICE Benchmark Administration (IBA) has announced that it intends to cease the publication of LIBOR based on the current methodology referencing rates provided by panel banks (panel-based LIBOR) immediately after end-2021 except for certain US dollar LIBOR settings. In addition, the UK Financial Conduct Authority (FCA) has announced on the same day that it will consult on the use of the proposed powers under the UK Financial Services Bill to require IBA to publish the 1-month, 3-month and 6-month JPY LIBOR settings on a synthetic basis (synthetic LIBOR) for one additional year after end-2021.

In consideration of the above announcements, the Bank of Japan (BOJ) and Financial Services Agency (FSA) have sent a joint letter to financial institutions through relevant trade associations, which presents the expectation of the BOJ and FSA on transition away from panel-based LIBOR and on synthetic yen LIBOR.