The Bank of England - SONIA Reforms
The Bank of England (BoE) has recently published a consultation paper on reforming the Sterling Overnight Index Average (SONIA) benchmark. It had conducted a similar exercise, albeit exploratory, as a public consultation in Q3-Q4 of 2015 with the objective of monitoring the sterling overnight money market and reforming the SONIA benchmark. The outcome of the previous iteration of the consultation resulted in the BoE issuing a four-step process of reforming the £46 trillion be
CFTC's Enforcement Actions: Haunted Past or a Hopeful Future?
The aftershocks of financial benchmark crisis that shook the financial world not-so-long-ago are felt even today with the regulators around the world still picking up the remnants of investor confidence and nursing it back to vitality. The recent (May-2016) wave of Commodity Future Trading Commission’s (CFTC) regulatory orders surrounding alleged benchmark manipulation by Citibank and the consequent settlement penalties to the tune of $425 million (LIBOR - $175mn, and ISDAFix
European Benchmark Regulation - Sufficient to Prevent a LIBOR Like Crisis Repeat?
The ink has not yet dried on the drafts of European Benchmark Regulation (Regulation) and while the markets and the industry are trying to gauge the effect of this all encompassing regulation, one thing seems increasingly evident - the benchmark regulatory practices across the globe converging towards the same destination - of Restoring Investor Confidence. However, it may be noted that the objective of restoring investor confidence is only the first step - which in turn lead
Bank of England’s Risk-Free Reference Rates - In the Quest of LIBOR Replacement
Recap For the better half of this decade, one could not help but hear and acknowledge the growing phenomenon of Financial Benchmark Reforms - an aftermath of manipulation and false reporting of global interest rate benchmarks. From the Wheatley Review in 2008 to the latest European Benchmark Regulation, regulators, administrators and market participants are engaging actively to restore investor confidence into the tainted benchmarks. Much of this work is in line with the Fina
SONIA - A New Beginning towards Benchmark Buoyancy
In line with its strategy of reforming key interest rate benchmarks, the Bank of England (BoE) recently announced that it would be taking over as the administrator of Sterling Overnight Index Average (SONIA) from April 25, 2016. SONIA, which reflects the bank and building societies’ overnight funding rates in the sterling unsecured market, was administered by Wholesale Market Brokers’ Association (WMBA) until recently under the supervision of Financial Conduct Authority (FCA)
