,Singapore

APAC banks on track for LIBOR phase-out: S&P

Singapore banks are leading the way in adopting alternative reference rates.

Banks in APAC are on track for a smooth transition away from LIBOR (London Interbank Offered Rate), with Singapore leading the way in adopting alternative reference rates (ARRs), reports S&P Global Ratings.

Whilst the phasing out of non-US dollar LIBOR presents immediate issues for banks in the region, these issues are manageable, the ratings agency noted.

"The banking sectors and markets in Asia-Pacific vary greatly in size and complexity. This diversity carries through to the LIBOR transition; no single LIBOR transition story applies to all banking jurisdictions in this region,” said S&P Global Ratings Credit Analyst Nico DeLange. 

Each country has taken a slightly different approach to transitioning and the implementation of country-specific ARRs. The level of preparedness also varies across jurisdictions, he added.

Notably, several APAC jurisdictions have reportedly opted for a multirate approach to benchmark rate transitioning; that is, they have kept an existing benchmark rate in addition to their new ARR. A multirate approach lowers transition and systemic risk for benchmark rate implementation, DeLange said.

“It also provides banks with a choice of the most appropriate benchmark rate for future contracts,” he added. “That said, the adoption of a multirate approach could lower the urgency for banks to shift to an ARR and may therefore result in a slower adoption rate.”

Join Asian Business Review community
Since you're here...

...there are many ways you can work with us to advertise your company and connect to your customers. Our team can help you dight and create an advertising campaign, in print and digital, on this website and in print magazine.

We can also organize a real life or digital event for you and find thought leader speakers as well as industry leaders, who could be your potential partners, to join the event. We also run some awards programmes which give you an opportunity to be recognized for your achievements during the year and you can join this as a participant or a sponsor.

Let us help you drive your business forward with a good partnership!

The bank said the merger is crucial in the REIT sector.
The company also experienced a loss of $647m for H1.
Entry submission runs from 6 September 2021 to 7 January 2022.
This is expected to speed up the electronic exchange of trade documents.
The insurer plans to use the fresh capital for product development.
The digital payments platform has teamed up with bolttech for this latest project.
This will take effect on 11 November 2021.
Cigna has operations in seven markets in Asia-Pacific.
Singapore banks are leading the way in adopting alternative reference rates.
8 out of 10 consumers in the region use online platforms to discover items they want to buy. 
ZALORA provides brands with data-driven insights derived from its 2.6 million users.
81% of banks seek to differentiate their customer experience.
The two hope to dispense over US$1b of loans over the next five years.
Mobile wallet adoption in Thailand, Vietnam far exceed those in the US, the UK.