FMLC CEO Joanna Perkins gave a speech at Infoline’s Risk Free Rate conference on navigating the transition to a Risk Free Rate. She provided an overview of the Financial Stability Board’s review of interest rate benchmarks and the development of new RFRs in various jurisdictions, the FCA’s announcement that it would cease to support LIBOR after 2021 and the legal risks associated with a transition from LIBOR to an RFR. She concluded by identifying solutions to smooth the transition of the bulk of legacy contracts.
In an article for Butterworth’s Journal of International Banking and Finance Law, Dr Perkins and Jennifer Enwezor, former Project Manager at the FMLC Secretariat, examine the difficulties in the transition from IBOR benchmarks to alternative risk-free rates (“RFRs”). They consider the question asked frequently in relation to the LIBOR transition—whether the move from a single calculation methodology to multiple methodologies in multiple jurisdictions will have significant negative impact—and determines that it is likely to be less of an obstacle than market discussions would suggest.
Dr Perkins published an article entitled Benchmark transition under the new E.U. Regulation in the November edition of the Butterworth’s Journal of International Banking and Finance Law. The article provided an overview of the Benchmarks Regulation (EU 2016/1011), including its scope and proportionality and the requirements it imposes for oversight of the benchmark administrator. In particular, and in response to concerns that some benchmarks might be withdrawn for non-compliance, the article examines the Regulation’s transitional provisions, which are of increased relevance in light of planned changes in relation to key interest rate benchmarks and the U.K.’s imminent withdrawal from the E.U.
The article can be downloaded below.
At a seminar in Paris, organised by RIMES on 13 June 2017, on preparing for the incoming E.U. Benchmarks Regulation, FMLC CEO Joanna Perkins presented uncertainties related to benchmark evolution and regulation.
Dr Perkins gave a similar presentation at an event on the same topic in London on 7 June 2017.
The slides and speaking notes pertaining to Dr Perkins’ presentations are available below.
FMLC CEO Joanna Perkins gave a presentation at the Annual P.R.I.M.E. Conference at The Hague on the progress and challenges of reforming key interest rate benchmarks. She discussed the process of overhauling benchmarks regulation over the last four-and-a-half years, including proposals to rethink the calculation of LIBOR, SONIA and EURIBOR. In the presentation, Joanna also considered the possibility of frustration risk for financial contracts arising from benchmark withdrawal, cautioning that although it has historically remained low, regulators and administrators ignore the legal risks of benchmark transition at their own peril.
Joanna delivered a similar presentation at an Infoline event entitled Managing Benchmark Regulation Reform.
The speaking notes for the presentation are available below.