Korea Plans Incentives to Spur Adoption of New Reference Rate
- Government preparing administrative guidance, incentive plans
- BOK governor says Korea’s reference-rate transition too slow
Authorities may consider banks’ performance in Korea Overnight Financing Repo Rate-linked transactions when selecting institutions for the Bank of Korea’s open market operations.
Photographer: Jean Chung/BloombergSouth Korea floated incentives to accelerate the adoption of the Korea Overnight Financing Repo Rate as a reference rate in financial markets, aiming to catch up with a global trend of ditching benchmarks based on bank submissions such as Libor.
Authorities may consider banks’ performance in KOFR-linked transactions when selecting institutions for the Bank of Korea’s open market operations, according to a joint statement released Wednesday by the central bank and the Korea Capital Market Institute. Any changes are likely to be applied in 2025, Hwang Young Woong, head of BOK’s money markets team, said during a conference on Wednesday.