London Interbank Offered Rate (LIBOR) Transition
The transition away from LIBOR as a reference rate benchmark poses financial, legal, operational, and consumer protection risks for institutions with exposure. Exposure is generally measured as the size of any activity and the number of counterparties or consumers with financial contracts that reference LIBOR across all products. It is important that institutions with LIBOR exposure have appropriate risk management processes in place to identify and mitigate transition risks.
Laws and Regulations
Key laws and regulations that pertain to FDIC-supervised institutions; note that other laws and regulations also may apply.
Part 349 Derivatives — Appendix A Margin and Capital Requirements for Covered Swap Entities
(also known as the Swap Margin Rule) establishes initial and variation margin requirements for covered swap entities
Relevant Federal Register Notice incorporated into Part 349 that describes the basis and purpose of the rule and its revisions
Margin and Capital Requirements for Covered Swap Entities
permit swaps entered into prior to an applicable compliance date (legacy swaps) to retain their legacy status in the event that they are amended to replace an interbank offered rate (IBOR) or other discontinued rate
Frequently asked questions, advisories, statements of policy, and other information issued by the FDIC alone, or on an interagency basis, provided to promote safe-and-sound operations.
Joint Statement on Managing the LIBOR Transition
highlights potential risks that may result from the expected discontinuation of LIBOR and its use as a reference rate, and encourages institutions to continue preparing for the transition
Consumer Financial Protection Bureau LIBOR Transition Resources
include examples of replacement indices that meet Regulation Z standards, LIBOR transition FAQs, and an updated Consumer Handbook on Adjustable Rate Mortgages (CHARM) to address the transition and remove references to LIBOR
Supplemental information and guidance related to safe and sound banking operations.
Informational videos and recordings of prior webcasts and teleconferences.