risk in the interest rates for interbank transactions. at the time of the global financial crisis, the banks ′ credit risk was recognized in light of the possibility of bank failures, and libor rose sharply as a result ( figure 2 ). at the same time, against the backdrop of mutual distrust among market participants, we saw substantial shrinkage in the unsecured money market among banks, which was the basis for libor panel banks in determining the submission rates. in 2012, it came to light that some panel banks had submitted fraudulent rates during the global financial crisis. going back to 1998, the submission rates of panel banks were changed to the banks ′ own funding rates, while, as mentioned earlier, those rates were originally the funding rates of prime banks. a decade later, as the credit risk of banks inherently embedded in libor came to the surface with the occurrence of the global financial crisis, some banks submitted fraudulent rates for their own benefit, such as making it appear as though their creditworthiness was higher than it actually was. as a result, the reliability of libor as an interest rate benchmark started to be seriously questioned. toward interest rate benchmark reform given that libor is widely used in a range of areas, a decrease in its reliability would give rise not only to concerns about the formation of fair prices in financial markets, including the derivative market, but also could threaten financial stability due to libor ′ s influence on corporate financing through debt instruments such as loans and bonds. as a result, there have been calls for initiatives to secure the robustness of interest rate benchmarks to prevent such fraudulent manipulation and to restore the reliability of interest rate benchmarks, including libor. these initiatives are referred to as the " interest rate benchmark reform " ( figure 3 ). the impact of the attempted market manipulation and false reporting of libor was so significant that the issue was discussed at the g20 st. petersburg summit in september 2013. to restore the reliability of interest rate benchmarks, the g20 endorsed the principles for financial benchmarks established by the international organization of securities commissions ( iosco ) and requested the financial stability board ( fsb ) to undertake a fundamental review of major interest rate benchmarks and reform plans. in response, the fsb published a report in july 2014 titled " reforming major interest rate benchmarks. " the current interest rate benchmark reform is being promoted based on that report. based on the overarching perspective that benchmark rates should be anchored

to initiatives by individual companies and the entire market, it is important for the public sector to have the perspective of ensuring the formation of fair prices and the stability of financial transactions in financial markets both before and after the discontinuation of libor ( figure 8 ). therefore, with respect to initiatives by individual companies, it is necessary to strongly encourage financial institutions to take specific actions. in this regard, we at the bank of japan, have conducted a joint survey recently with the jfsa regarding financial institutions ′ status of using libor and governance framework. in addition, with respect to market - wide initiatives, it is important for the public sector to concurrently play the role of a coordinator and a facilitator. for the ongoing interest rate benchmark reform, the public sector needs to simultaneously review various frameworks and practices that have been developed based on libor. it also needs to proceed with that complex process while coordinating the different viewpoints of a diverse range of parties. as the central bank and the secretariat of the cross - industry committee on japanese yen interest rate benchmarks, the bank of japan continues to support interest rate benchmark reform from those perspectives while simultaneously cooperating with the jfsa. toward the end of 2021 in taking the various measures mentioned to this point, it is very important for both the private and public sectors to keep in mind the timeline of when the discontinuation of libor is expected ; that is, up to the end of 2021. going forward, given the magnitude of work, including reviewing the operations of individual companies, responding to clients, and reviewing market practices, two years is by no means a long time. in order to accomplish the interest rate benchmark reform by also utilizing the results of past deliberations, it is necessary for all relevant parties in the private and public sectors to steadily implement measures while appropriately cooperating with each other by keeping in mind the limited time until the end of 2021. closing remarks : improving the attractiveness of tokyo ′ s financial markets as explained so far, the private and public sectors must cooperate with each other to seriously tackle the common goal of transitioning to a new framework for the interest rate benchmark that will replace libor. lastly, i would like to discuss what we should aim for by achieving the interest rate benchmark reform through considerable efforts and substantial costs to be borne by the relevant parties, including those of you who are here today. interest rate benchmarks are an important infrastructure with which economic entities