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".

UK: Wheatley Review implementation - consultation on draft secondary legislation

HM Treasury has published for consultation draft secondary legislation in respect of the Government's implementation of the recommendations made by the Wheatley Review of LIBOR: see here (pdf).

UK: Financial Services Bill begins report stage in House of Lords

The Financial Services Bill begins the report stage today in the House of Lords. A list of the amendments being considered is available here. The amendments for consideration include those put forward by Lord Sassoon, on behalf of the Government, to implement some of the recommendations of the Wheatley Review of LIBOR. A copy of the Bill, as it stood at the start of the report stage, is available here (pdf).

UK: Wheatley Review of LIBOR - Government response

The Government has published its response to the recommendations made by Martin Wheatley with regard to the reform of the London Inter-Bank Offered Rate (LIBOR) setting process: see here (pdf). Mr Wheatley's ten recommendations have been accepted in full and various amendments are proposed to the Financial Services Bill currently before Parliament. The Government has also announced that Baroness Hogg, the chairman of the Financial Reporting Council, will lead a panel to find a new organisation to administer LIBOR (thereby replacing the BBA).

UK: Financial Services Bill - Committee stage debate resumes

The House of Lords resumed its consideration of the Financial Services Bill yesterday at Committee stage. Hansard, the official record of debate, is available here and a video recording of the debate is available here. At the start of debate, Lord Sassoon, the Commercial Secretary to the Treasury, was asked to comment on the implementation of the recommendations made in the Wheatley Review of LIBOR. He responded: "Should the Government decide to accept Martin Wheatley's recommendations in full, we anticipate that the clauses which would implement the review will indeed be debated at the Report stage of this Bill, and the draft clauses will be published in good time in advance of that date" (Hansard, col. 830).

UK: The Wheatley Review of LIBOR - discussion paper published

Martin Wheatley, the chief executive designate of the new Financial Conduct Authority and current head of the Financial Services Authority's Conduct of Business Unit, delivered a speech today in which he spoke about his review of LIBOR and the publication of a discussion paper. The paper, available here (pdf), seeks views on possible reform options and makes clear that retaining LIBOR in its current state is not viable. The paper also states that alternative benchmarks that can take on some (or all) of the roles currently performed by LIBOR should be identified and evaluated. Mr Wheatley's final report is expected by the end of next month in order to permit the Government to include, if necessary, legislative changes in the Financial Services Bill currently before Parliament.