On November 14, 2018, the FSB published a progress report on ongoing reforms to major interest rate benchmarks. The FSB has been coordinating international reform work, through its Official Sector Steering Group, since 2014, when it made several recommendations aimed at addressing cases of attempted manipulation in relation to key IBORs and the decline in liquidity in certain interbank unsecured funding markets. The OSSG launched a third major initiative in 2016, to improve contract robustness to address risks of discontinuation of widely-used interest rate benchmarks. That initiative is being led by the International Swaps and Derivatives Association, which launched a consultation on fallback rates in July 2018.

The progress report provides an update since the FSB's progress report in October 2017 and covers:

  1. Developments in Interbank Offered Rates, including discussion of the future of LIBOR.
  2. Identification of and transition to risk-free rates, where appropriate, for transactions denominated in USD, EUR, JPY, GBP, CHF, AUD, BRL, CAD, HKD, MXN, SGD and ZAR.
  3. The development of fallback rates to enhance contractual robustness.

The FSB proposes to publish a further progress report in late 2019.

The progress report is available at: http://www.fsb.org/wp-content/uploads/P141118-1.pdf, details of the October 2017 progress report are available at: https://finreg.shearman.com/financial-stability-board-seeks-more-action-on-re, details of ISDA's July 2018 consultation on fallback rates are available at: https://finreg.shearman.com/financial-stability-board-welcomes-isda-consultat and FSB statement welcoming ISDA's July 2018 consultation is available at: https://finreg.shearman.com/financial-stability-board-welcomes-isda-consultat.

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