Press release on ceasing the publication of LIBOR (London Interbank Offered Rate) settings
06.04.2021
The National Bank of Romania (NBR) is the national competent authority in the field of supervising interest indices used by credit institutions and non-bank financial institutions as benchmarks in credit agreements, as regulated at European level by Regulation (EU) 2016/1011 on indices used as benchmarks in financial instruments and financial contracts or to measure the performance of investment funds (the Benchmark Regulation).
Considering the announced ceasing of publication of LIBOR settings (ICE press release ) for CHF, EUR, GBP and JPY as of January 2022 and for USD as of mid-2023, amendments have recently been adopted at EU level with regard to the Benchmark Regulation, aimed at mitigating the effects of the cessation of LIBOR settings. Thus, the European Commission will set one or several benchmarks to replace LIBOR indices in contracts and financial instruments.
Preparations for the transition to a new set of benchmarks replacing LIBOR are already underway at European level, and the NBR will be actively involved in this endeavour, alongside the European Commission, other central banks and national competent authorities. The European Commission analyses will cover various computation methods and spread adjustments to replace LIBOR indices, for the purpose of identifying the best option, in view of the particular features of financial markets, but also the existing legal requirements regarding consumer protection in financial services.
Once the process is completed, the European Commission will issue an implementing act, which will be uniform and directly applicable in all EU Member States. Thus, any LIBOR rate will be automatically replaced, de jure, in any and all contracts with the new benchmark replacement rate, without requiring the renegotiation of contracts, unless the parties thereto agree on another benchmark beforehand.
The NBR will issue another press release on this matter after the announcement of the LIBOR replacement benchmarks taken into consideration by the European Commission.