Edmond Lau: LIBOR transition and sustainable finance Keynote address by Mr Edmond Lau, Senior Executive Director of the Hong Kong Monetary Authority, at the 2021 International Swaps and Derivatives Association (ISDA) Asia-Pacific Conference, 19 October 2021. * * *  Opening 1. Good morning. I’m very glad to join you virtually today at this ISDA conference. The ISDA Asia-Pacific Conference has always served as an important forum, bringing together participants across the capital and derivatives markets to discuss key global issues with an Asia-Pacific focus, while at the same time contributing ideas and thoughts on areas where we share common interests. 2. In today’s conference, I would like to share my views on two hot topics: (1) LIBOR transition; and (2) sustainable finance. The development of these two subjects would bring changes to our financial landscapes and business practices, requiring our prompt action and swift transition. LIBOR Transition 3. First, let me begin by making a few remarks on LIBOR transition. Now, with less than 3 months to count down to end-2021, LIBOR cessation will soon turn into reality. At this critical point in time, it is important for us to further our efforts, and forge ahead with all the preparatory work necessary to get ourselves ready for this transition. International and Regional Coordination 4. Given the dynamic and evolving nature of this subject, it is also important for us to keep a close watch on ongoing developments, and play an active part in various international fora.

Globally, the Official Sector Steering Group (OSSG) established under the Financial Stability Board has been monitoring closely the LIBOR transition progress, and providing helpful guidance to the industry through the publication of the Global Transition Roadmap. As a member of the OSSG, we have been working closely with other overseas authorities and contributing our efforts to this global exercise. As with the implementation of other global financial reforms, international cooperation is crucial, not only in setting globally consistent expectations and milestones, but also in minimizing any potential fragmentation in the transition across different jurisdictions. 5. In addition to our active role in the international arena, we at the HKMA have also attached great importance to harness the region’s collective voice in these global issues. Especially, with my role as the chair of the Executives’ Meeting of East Asia-Pacific Central Banks’ (EMEAP) Working Group on Financial Markets (W GFM), we have devoted much attention to topical issues like LIBOR and local Alternative Reference Rates transition, and helped our regional peers push forward with their preparation for the transition. I’m glad to see that the W GFM has been a useful platform that complements the bilateral discussion of member jurisdictions with ISDA, and facilitates certain members’ participation in the 2nd ISDA IBOR Fallback Protocol. I understand that ISDA is planning to publish the 2nd Protocol by the end of this year. Joint Industry Efforts to Support the Transition 6. Besides policy guidance and regulatory push, active participation by industry is also key in ensuring a smooth LIBOR transition.