financial services agency ( jfsa ) and paying attention to overseas developments on the libor transition. thank you very much for your attention. libor transition in the final stage : there will be no deus ex machina speech at the nikkei financial online seminar held by nikkei june 8, 2021 amamiya masayoshi deputy governor of the bank of japan chart 1 initiatives for the libor transition in japan 1st stage ( 2012 - ) both yen libor and tibor ( calculated based on interbank rates in the tokyo market ) became subject to the enhancement of robustness as benchmarks the uncollateralized overnight call rate was identified as the yen risk - free rate in japan 2nd stage ( july 2017 - ) the cross - industry committee on japanese yen interest rate benchmarks ( the committee ) was established. it promoted considerations on the choice and usage of alternative interest rate benchmarks replacing yen libor final stage ( march 2021 - ) with more progress made in the considerations, tools necessary for the transition are ready - > now the focus is on the actual transition activities by individual market participants chart 2 three options for alternative interest rate benchmarks tibor based on interbank rates submitted by 15 financial institutions in japan, including major banks o / n rfr compounding ( fixing in arrears ) based on the uncollateralized overnight call rate used in actual transactions the most robust benchmark, but it may be less compatible with the existing administrations and systems because the interest amount is only finalized just before the next payment torf （ tokyo term risk free rate ） the term risk - free rate in japan based on the ois rate, a fixed interest rate exchanged in the interest rate swaps ( irs ) to a floating rate calculated using the uncollateralized overnight call rate compounded in arrears it may be more compatible with the existing operations and systems but how to establish its robustness is a critical issue chart 3 toward the acceleration of the libor transition milestone the issuance of new transactions for loans and bonds referencing yen libor needs to be ceased by the end of june 2021 tools for the success the committee indicated in the results of its first public consultation that the term riskfree rate received the most support as an alternative benchmark the publication of a production rate for torf started on april 26, 2021 ( about two months ahead of its initial schedule ) chart 4 toward the acceleration of the libor transition milestone the amount outstanding of legacy contracts for loans and bonds referencing

improvement of transparency in the calculation process, and the sufficiency of market liquidity of the underlying ois market. as i have just laid out, there are multiple options for alternative interest rate benchmarks to yen libor. under these circumstances, market participants need to consider the optimal selection of the benchmark options according to the financial products they have, the nature of transactions they face, and their own individual business needs, and then to begin new transactions or make changes to their legacy contracts with the chosen alternative benchmark. to support initiatives by each of market participants, the committee has provided the results of various discussions and deliberations and some recommendations concerning the libor transition. among those provided by the committee is " roadmap to prepare for the discontinuation of japanese yen libor " ( hereafter the " roadmap " ), which indicates milestones that market participants should take into account in the making of their own roadmap for transition. 3 cross - industry committee on japanese yen interest rate benchmarks ( 2021 ), " roadmap to prepare for the discontinuation of japanese yen libor. " in the next section, i would like to explain three points that market participants should note, mainly by addressing major milestones in the roadmap. ii. toward the acceleration of the libor transition a. cessation of the issuance of new transactions referencing yen libor first, according to the roadmap, the issuance of new transactions for loans and bonds referencing yen libor needs to be ceased by the end of this june ( chart 3 ). the roadmap is based on the consensus of major market players in a wide range of businesses, which was reached through a series of their deliberations with related international discussions taken into account. given the existence of the consensus, it is important that market participants complete their preparations for conducting new transactions referencing alternative interest rate benchmarks within the remaining time of less than one month. tools necessary for ceasing the issuance of new transactions by the end of this june are already available. in july 2019, the committee carried out its first public consultation on the choice of alternative interest rate benchmarks to yen libor, including the ones for new loans and bonds, in order to solicit comments from a wide range of market participants. the results of the first public consultation were then published in november the same year. they showed that a term risk - free rate received the most