(Bloomberg) -- The Hong Kong Monetary Authority has pushed back a target for banks to phase out certain products tied to the London interbank offered rate, according to a statement Thursday.
HKMA said that the so-called milestone for banks to cease issuing new Libor-linked products that will mature after 2021 will now be the end of this year. That's a shift from the previous goal of the end of June.
HKMA said it and the Treasury Markets Association agreed that it's no longer appropriate to stick to the end-June deadline partly in light of feedback from banks. The HKMA added that authorized institutions should press ahead with their transition preparations.
Global regulators are driving the shift to alternative risk-free rates to replace Libor, which was tainted by a rate-rigging scandal but still underpins hundreds of trillions of dollars worth of financial assets.
Read a QuickTake Q&A about Libor transition here
The latest change will more closely align Hong Kong's schedule with a similar timetable in the U.S., where authorities have asked banks to stop entering new contracts based on U.S. dollar Libor after the end of 2021. Last year, the ICE Benchmark Administration Ltd., which is the administrator of the dollar benchmark, also said it was looking to push back the timeline for abandoning some of the discredited interest-rate settings to mid-2023.
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