Interest rate benchmarks are a cornerstone of the global financial system and are used by market participants across a wide range of financial products and contracts. In 2013, the Financial Stability Board (FSB) established the Official Sector Steering Group (OSSG) to advise the FSB on recommendations to strengthen existing interbank offered rate benchmarks (commonly known as IBORs), as well as to promote the development of alternative risk-free or nearly risk-free reference rates that could be used for some types of transactions. Both existing and new benchmarks would need to adhere to international regulatory standards, including the International Organization of Securities Commissions (IOSCO) Principles for Financial Benchmarks.
In response, Canada established the Canadian Alternative Reference Rate Working Group—sponsored by the Canadian Fixed-Income Forum.
CARR’s primary objectives will be to:
- support the adoption of, and transition to, the Canadian Overnight Repo Rate Average (CORRA) as a key financial benchmark for Canadian derivatives and securities; and
- analyze the current status of the Canadian Dollar Offered Rate (CDOR) and its efficacy as a benchmark, as well as make recommendations on the basis of that analysis.
CARR also oversees the CORRA Advisory Group.
Overview on Financial Benchmark Reform Efforts
Bank of Canada publishes the Canadian Alternative Reference Rate Working Group’s Consultation Paper on Proposed Enhancements to the Canadian Dollar Overnight Repo Rate Average (CORRA)The Bank of Canada, on behalf of the Canadian Alternative Reference Rate Working Group (CARR), has published a consultation on proposed enhancements to the Canadian Overnight Repo Rate Average (CORRA) risk-free interest-rate benchmark.
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Managing Director and Vice-Chair, Global Markets
CIBC Capital Markets
Alberta Investment Management Corporation
Bank of America Merrill Lynch
Bank of Montreal
Canada Mortgage and Housing Corporation
Canadian Imperial Bank of Commerce
National Bank of Canada
Ontario Teachers’ Pension Plan
Royal Bank of Canada
Sun Life Financial
Canadian Derivatives Clearing Corporation