A Bank of Japan official urged Asian financial institutions and policymakers to ensure a smooth transition from the London Interbank Offered Rate, which is likely to be discontinued after 2021.
LIBOR is a widely used global interest rate benchmark for financial transactions but was embroiled in a scandal after the 2008 financial crisis when banks colluded to fix the rate to their benefit.
Speaking at the annual conference of the Asia Securities Industry & Financial Markets Association in Tokyo, BOJ Deputy Governor Masayoshi Amamiya said LIBOR's permanent discontinuation "would be one of the most significant events in global financial history," stressing the importance of working together toward a smooth transition to alternative benchmarks.
Japan has undertaken measures to prepare for the possible discontinuation of Japanese yen LIBOR, Amamiya said.
