Financial Institutions' Preparedness for LIBOR Cessation and Future Actions with a Focus on the Results of the Joint Survey by the Financial Services Agency and the Bank of Japan
August 11, 2020
Financial System and Bank Examination Department of the Bank of Japan
Strategy Development and Management Bureau and Supervision Bureau of the Financial Services Agency
London Interbank Offered Rate (LIBOR) is used in a broad range of financial transactions, but it will likely cease at end-2021. All LIBOR users, including financial institutions and their corporate clients, need to make necessary preparations while being aware of the limited time available as only a year and a half remains until end-2021. The survey on the use of LIBOR jointly conducted by the Financial Services Agency and the Bank of Japan aims to (1) accurately ascertain financial institutions' outstanding balances of financial instruments and transactions that reference LIBOR, the adoption of alternative benchmarks to LIBOR, and the status of establishing a managerial framework and allocating staff to prepare for LIBOR cessation at financial institutions, as well as (2) further encourage financial institutions to ensure a smooth transition. This paper highlights the results of the first round of the joint survey conducted in October-December 2019.
Bank of Japan Review is published by the Bank of Japan to explain recent economic and financial topics for a wide range of readers. This report, 2020-E-6, is a translation of the original Japanese version, 2020-J-7, published in July 2020.
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