Phasing Out LIBOR after 2021: Notes and Legal Considerations Concerning the Cross Industry Committee on Japanese Yen Interest Rate Benchmark’s Public Consultation PaperFinance Law Newsletter
In July 2017, Andrew Bailey, Chief Executive of the UK Financial Conduct Authority, declared that the authority would no longer persuade or compel panel banks to make LIBOR (London Interbank Offered Rate) submissions after 2021. As submissions are necessary for the creation of LIBOR, which is widely referenced to determine applicable interest rates in financial transactions, concern has increased among market participants that LIBOR itself would not exist after 2021.
In Japan, the issue of LIBOR discontinuation led to the establishment of a Cross Industry Committee on Japanese Yen Interest Rate Benchmarks in August 2018. The Committee published the Public Consultation on the Appropriate Choice and Usage of Japanese Yen Interest Rate Benchmarks in July 2019.
In our newsletter, we will discuss the Japanese response by presenting the main points of this committee’s consultation paper and consider the legal issues anticipated to derive from their suggestions.