The letter raises three important issues that the OSSG believes ISDA is moving to address:
the addition of other trigger events;
the timing for an ISDA consultation on U.S. dollar (USD) LIBOR and certain other key Interbank Offered Rates IBORs;
the governance and transparency necessary as ISDA makes its final decisions.
The letter encourages ISDA to ask for market opinion on the events that would trigger a move to the spread-adjusted fallback rate for derivatives referencing IBORs. Triggers that would only take effect on the date on which LIBOR permanently or indefinitely stopped publication could leave those with LIBOR-referencing contracts still exposed to a number of risks. The OSSG also understands that ISDA intends to consult on USD LIBOR, CDOR, HIBOR and SOR in early 2019, and the OSSG strongly supports this. The OSSG Co-chairs also encourage ISDA to consult on the key technical details that ISDA’s Board Benchmark Committee will need to decide on before implementation can begin.
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