Friday, 30 November 2012

Hong Kong: HIBOR report and reform recommendations

Following the problems recently identified with the setting of the London Inter-Bank Offered Rate (LIBOR), authorities elsewhere in the world have reviewed the manner in which benchmarks are set. In Hong Kong a review of the Hong Kong Interbank Offered Rate (HIBOR) was undertaken by the Treasury Markets Association (TMA) and a report published earlier this week (and submitted it to the Hong Kong Association of Banks (HKAB) for consultation): see here (pdf). The report make a number of recommendations, some similar to those made by the Wheatley Review in respect of LIBOR, including greater transparency with regard to the data used to support participating banks' submissions.

The Hong Kong Monetary Authority, in a press release noting the report's publication, has stated: "Without pre-judging the outcome of the consultation exercises, the HKMA wishes to reiterate that the market expects to see refining measures that would help increase the transparency of the fixing process, promote discipline and strengthen internal control amongst reference banks in submitting reference rates, and enhance governance for the fixing regime".

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