On 22 July 2014, the Financial Stability Board (“FSB”) published a report on the reform of major interest rate benchmarks, the main benchmarks being the IBORs (see above). The FSB recommends a multiple-rate approach to the strengthening  of existing IBORs, as well as other potential reference rates based on unsecured bank funding costs by underpinning them with transaction data as much as  possible (the enhanced rates are referred to as “IBOR+”). The FSB also recommends developing alternative and nearly Risk-Free Rates (“RFRs”), which   it considers would be more suitable to certain financial transactions, including many derivative transactions. The FSB will supervise and monitor the implementation of the recommended reforms. Concrete proposals and timelines  for the strengthening of existing benchmarks and further work on the development and introduction of additional benchmarks are set out in the report. IBOR administrators are consulted on any recommended changes relating to IBOR+ before the end of 2015. At least one IOSCO-compliant RFR is to be implemented by central banks and supervisory authorities by the second quarter of 2016. The FSB is expected to produce a final monitoring report in 24 months’ time and an interim progress report in 12 months’ time.

The FSB report is available here: