Risk of the cessation of publication of benchmark interest rates such as LIBOR and the transition to alternative benchmarks
First written in FY2021-Q1. 4 of 9 entries say "Advanced", first in FY2022-Q2. Latest entry: FY2024-Q2.
The whole theme swung hardest in 2023: 1 of 11 companies on the "Worse" side.
3 other companies' latest entry also says "Dropped".
- FY2024-Q2DroppedAnnual report
「In August 2023, the Bank Group completed fallback arrangements for all LIBOR-referencing products held in its in-house portfolio. As the possibility of an event having a material impact on the results of operations and financial condition of the Bank Group has consequently decreased, we determined that disclosure was no longer necessary in terms of materiality and have omitted this risk, which was disclosed in the previous fiscal year’s Securities Report and the first-quarter report for the current fiscal year.」
Fallback arrangements for all LIBOR-referencing products held in the in-house portfolio were completed in August 2023, and disclosure of the LIBOR risk was discontinued. - FY2023RestatedAnnual report
「However, regarding the scheduled discontinuation at the end of June 2023 of publication of certain US dollar LIBOR tenors, matters including market conventions concerning successor benchmarks remain undecided.」
Although publication of most LIBOR tenors has been discontinued and transition measures implemented, matters remain undecided regarding the scheduled discontinuation at the end of June 2023 of certain US dollar tenors. - FY2023-Q1AdvancedAnnual report
「The Bank applies Practical Solution Report No. 40, “Accounting Treatment for Hedge Accounting Relating to Financial Instruments Referencing LIBOR” (17 March 2022), to these hedging relationships.」
Regarding the response to the discontinuation of LIBOR publication, the Bank reached the stage of applying Practical Solution Report No. 40 to its hedging relationships. - FY2022AdvancedAnnual report
「As announced, publication of LIBOR has been discontinued, except that certain US dollar tenors are scheduled to continue being published through the end of June 2023. The Bank has taken steps to transition to alternative interest rate benchmarks and implemented measures in preparation for the discontinuation of LIBOR publication at the end of December 2021.」
LIBOR publication was discontinued at the end of December 2021, and the Bank implemented transition measures. Matters remain undecided for certain US dollar tenors scheduled to continue being published through the end of June 2023. - FY2022-Q3AdvancedAnnual report
「As announced, publication of LIBOR has been discontinued, except that certain US dollar tenors are scheduled to continue being published through the end of June 2023. The Bank has taken steps to transition to alternative interest rate benchmarks and implemented measures in preparation for the discontinuation of LIBOR publication at the end of December 2021.」
LIBOR publication was discontinued at the end of December 2021, and the Bank implemented measures in preparation for the discontinuation. For certain US dollar tenors scheduled to continue being published through the end of June 2023, matters including successor benchmarks remain undecided. - FY2022-Q2AdvancedAnnual report
「The Bank is taking steps to transition to alternative interest rate benchmarks ahead of the discontinuation of LIBOR publication, and progress is also being made in the market, including the start of publication of finalized successor benchmark rates. However, matters including market conventions concerning successor benchmarks remain undecided.」
Regarding the discontinuation of LIBOR, the disclosure states that preparations for the transition to alternative benchmarks are under way and that the market has begun publishing finalized successor benchmark rates. However, undecided matters, including market conventions, remain. - FY2021WorsenedAnnual report
「On 5 March 2021, the LIBOR administrator, the ICE Benchmark Administration (IBA), announced that it would cease publishing LIBOR at the end of December 2021, except for certain US dollar tenors.」
The uncertainty surrounding LIBOR discontinuation became more concrete, moving from the possibility of discontinuation to the administrator’s announcement that publication would cease at the end of December 2021. - FY2021-Q3RestatedAnnual report
「The Bank is taking steps to transition to alternative interest rate benchmarks, based on its recognition that the possibility of LIBOR publication being discontinued after the end of 2021 has increased. However, many matters remain undecided, including market conventions concerning successor benchmarks and the timing of their introduction. The Bank’s financial assets referencing benchmark interest rates may incur losses as a result of changes to reference rates and valuation methods, while expenses may increase due to factors including the need for system development, potentially affecting the results of operations and financial condition of the Bank Group.」
Assuming that LIBOR publication may cease, the disclosure continues to describe the transition to alternative benchmarks, undecided market conventions and implementation timing, and the possibility of losses and system development costs. - FY2021-Q1First statedAnnual report
「The Bank is taking steps to transition to alternative interest rate benchmarks, based on its recognition that the possibility of LIBOR publication being discontinued after the end of 2021 has increased. However, many matters remain undecided, including market conventions concerning successor benchmarks, the timing of their introduction and their treatment under hedge accounting. The Bank’s financial assets referencing benchmark interest rates may incur losses as a result of changes to reference rates and valuation methods, while expenses may increase due to factors including the need for system development, potentially affecting the results of operations and financial condition of the Bank Group.」
On the assumption that the Bank holds and uses financial instruments referencing LIBOR and other benchmarks, the disclosure continues to identify as new risks the possibility that publication will cease after the end of 2021, the lack of clarity regarding successor benchmarks and market conventions, changes in valuation methods and system development costs.