FSB reports benchmark reform progress: FSB has published an interim progress report on its efforts to reform the major interest rate benchmarks (IBORs), and to develop and introduce alternative near risk-free interest rate benchmarks (RFRs). The report notes:

  • since July 2014, the administrators of the IBORs have all taken major steps in strengthening the benchmarks they administer and other reference rates based on unsecured bank funding costs by underpinning them to the greatest extent possible with transactions data;
  • this progress has included compiling reviews of respective benchmark methodologies and definitions, conducting data collection exercises and feasibility studies, consideration of transitional and legal issues, and broad consultations with submitting banks, users and other stakeholders;
  • jurisdictions beyond those to which the recommendations were originally addressed have also taken steps towards reforming the existing rates in their own jurisdiction; and
  • Official Sector Steering Group (OSSG) members have also made concrete progress in identifying potential RFRs.

The OSSG will continue to monitor progress in implementing FSB’s recommendations over the next year ahead, and will prepare an updated progress report for FSB in July 2016. (Source: FSB Interim Interest Rate Benchmark Reform Interim Report)