FSS "Response to LIBOR Rate Discontinuation... Most Contracts Transitioned"

On the 30th, the Financial Supervisory Service (FSS) announced that most financial contracts related to LIBOR, which will cease to be calculated next month, have been converted.

LIBOR is a quote-based benchmark interest rate used for fund transactions between major banks participating in the London financial market, and has been widely used as a reference rate in domestic and international financial transactions. Following a collusion scandal in 2012, LIBOR calculation has been gradually discontinued since last year. Since last year, the calculation of non-USD LIBOR and some USD LIBOR rates has been stopped, and from July this year, the remaining USD LIBOR calculations will be discontinued.

According to the FSS, as of the 23rd, the response rate for USD LIBOR-linked financial contracts is 97.2%, meaning that virtually most contracts have been converted. Considering unofficial agreements completed, contracts being reflected in documentation, and contracts scheduled for termination among the remaining contracts (2.8%, 1,059 cases) that have not yet been addressed, the response rate is approximately 99%.

The FSS stated, "To prevent disputes, we will encourage financial companies to respond to the remaining contracts as much as possible by the next interest rate calculation date according to their respective response plans," and added, "We will continue to monitor additional response situations."

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