Libor Self-Assessment

Forms and Documents

Forms and supporting documents for this ICR

Document	Type	Status	Availability
Libor Self-Assessment Tool	Form	New	Available
Libor Self-Assessment Emergency Request Letter to OMB 1-12-21.docx	Supplementary Document	Uploaded 2021-01-12	Available
LIBOR Self-Assessment Supporting Statement 1-11-21.docx	Supporting Statement A	Uploaded 2021-01-11	Available

IC Document Collections

Information collection document groups

IC ID	Collection	Type	Status	Form
245291	Libor Self-Assessment Tool	Form	New

ICR Details

OMB Control No: 1557-0349	ICR Reference No: 202101-1557-007
Status: Active	Previous ICR Reference No:
Agency/Subagency: TREAS/OCC	Agency Tracking No:
Title: Libor Self-Assessment
Type of Information Collection: New collection (Request for a new OMB Control Number)	Common Form ICR:  No
Type of Review Request: Emergency	Approval Requested By: 01/15/2021
OIRA Conclusion Action: Approved without change	Conclusion Date: 01/14/2021
	Date Received in OIRA: 01/14/2021
Terms of Clearance:

table that charts list comparision

	Inventory as of this Action	Requested	Previously Approved
Expiration Date	07/31/2021	6 Months From Approved
Responses	1,096	0	0
Time Burden (Hours)	8,768	0	0
Cost Burden (Dollars)	0	0	0

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Abstract: The expected cessation of the London InterBank Offered Rate (Libor) by the end of 2021 prompted the OCC to create a self-assessment tool that banks may use in preparing for the expected Libor cessation. The self-assessment tool may be used when a bank is assessing the appropriateness of its Libor transition plan, execution of the plan by its management, and related matters. The Intercontinental Exchange Libor is a reference rate that is intended to reflect the cost of unsecured interbank borrowing. Libor is published daily in five currencies with seven maturities ranging from overnight to 12 months. It is used globally in the over-the-counter derivatives market, bonds, loan products, and securitizations. As of the end of 2016, $199 trillion of financial instruments were exposed to U.S. dollar (USD) Libor as the primary reference rate. While reference rates have ceased to be reported in the past, the significant exposure to Libor creates the need to assess whether a bank is identifying applicable risks, preparing for the cessation, and successfully transitioning to replacement rates. Libor is referenced globally, and its cessation could affect banks of all sizes through direct or indirect exposure. There is risk of market disruptions, litigation, and destabilized balance sheets if acceptable replacement rate(s) do not attract sufficient market-wide acceptance, or if contracts cannot seamlessly transition to new rate(s). A bank’s risk exposure from expected Libor cessation depends on the bank’s specific circumstances. Many community banks may not offer products or services that use Libor. Community banks could, however, have Libor exposure in such positions as Federal Home Loan Banks (FHLB) borrowings, mortgage-backed securities, or bonds in the banks’ investment portfolios. Libor exposure can exist on or off the balance sheet, including assets, liabilities, , and asset management activities. Risk can also emanate from third-party relationships because Libor is often used in pricing models, financial models, and other parts of banks’ infrastructure, such as core processing. The ubiquity of LIBOR, present in over $200T notional contracts, makes moving off the rate incredibly complicated. Many existing contracts do not include sufficient provisions in the event that Libor becomes unavailable (known as fallback provisions). Without preparation, Libor cessation could cause market disruption and present risks to banks and their customers. In addition, the fallback language does not sufficiently account for a permanent cessation of LIBOR. The banking agencies published a statement dictating that banks should discontinue making LIBOR exposure by the end of 2021, but as soon as practicable (with a few exceptions for orderly market support). Given that we expect banks to discontinue making LIBOR loans by this year end, the prevalence of LIBOR and the remaining work to be done within the timeframe described above, the OCC is requesting emergency clearance for this self-assessment tool to be made available to banks due to the immediate need and the brief duration of use, to help banks prepare for Libor related risk.

Emergency Justfication: The expected cessation of the London Interbank Offered Rate (Libor) by the end of 2021 prompted the OCC to create a self-assessment tool for use by banks in preparing for the expected Libor cessation. There is a risk of market disruptions, litigation, and destabilized balance sheets if acceptable replacement rate(s) do not attract sufficient market-wide acceptance or if contracts cannot seamlessly transition to new rate(s). The ubiquity of LIBOR, present in over $200T notational contracts, makes moving off the rate incredibly complicated. Many existing contracts do not include sufficient provisions in the event that Libor becomes unavailable. Without preparation, Libor cessation could cause market disruption and present risks to banks and their customers. Given that we expect banks to discontinue making LIBOR loans by this year end, the prevalence of LIBOR and the remaining work to be done within the timeframe described above, the OCC is requesting emergency clearance for this self-assessment tool to be made available to banks due to the immediate need and the brief duration of used, to help banks prepare for Libor related risk.

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Authorizing Statute(s): None

Citations for New Statutory Requirements: None

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Associated Rulemaking Information
RIN:	Stage of Rulemaking:	Federal Register Citation:	Date:
	Not associated with rulemaking

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Federal Register Notices & Comments

Did the Agency receive public comments on this ICR? No

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Number of Information Collection (IC) in this ICR: 1

table that charts list of burden

IC Title	Form No.	Form Name
Libor Self-Assessment Tool	N/A	Libor Self-Assessment Tool

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ICR Summary of Burden

table that charts list of burden

	Total Approved	Previously Approved	Change Due to New Statute	Change Due to Agency Discretion	Change Due to Adjustment in Estimate	Change Due to Potential Violation of the PRA
Annual Number of Responses	1,096	0	0	1,096	0	0
Annual Time Burden (Hours)	8,768	0	0	8,768	0	0
Annual Cost Burden (Dollars)	0	0	0	0	0	0

Burden increases because of Program Change due to Agency Discretion: Yes

Burden Increase Due to: Miscellaneous Actions

Burden decreases because of Program Change due to Agency Discretion: No

Burden Reduction Due to:

Short Statement: The increase in burden is due to the creation of the Libor self-assessment.

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Annual Cost to Federal Government:

Does this IC contain surveys, censuses, or employ statistical methods? No

Does this ICR request any personally identifiable information (see OMB Circular No. A-130 for an explanation of this term)? Please consult with your agency's privacy program when making this determination.     No

Does this ICR include a form that requires a Privacy Act Statement (see 5 U.S.C. §552a(e)(3))? Please consult with your agency's privacy program when making this determination.     No

Is this ICR related to the Affordable Care Act [Pub. L. 111-148 & 111-152]? No

Is this ICR related to the Dodd-Frank Wall Street Reform and Consumer Protection Act, [Pub. L. 111-203]? No

Is this ICR related to the American Recovery and Reinvestment Act of 2009 (ARRA)? No

Is this ICR related to the Pandemic Response? No

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Common Form ICR:  No

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On behalf of this Federal agency, I certify that the collection of information encompassed by this request complies with 5 CFR 1320.9 and the related provisions of 5 CFR 1320.8(b)(3).

The following is a summary of the topics, regarding the proposed collection of information, that the certification covers:

(a) It is necessary for the proper performance of agency functions;

(b) It avoids unnecessary duplication;

(c) It reduces burden on small entities;

(d) It uses plain, coherent, and unambiguous language that is understandable to respondents;

(e) Its implementation will be consistent and compatible with current reporting and recordkeeping practices;

(f) It indicates the retention periods for recordkeeping requirements;

(g) It informs respondents of the information called for under 5 CFR 1320.8 (b)(3) about:

(i) Why the information is being collected;

(ii) Use of information;

(iii) Burden estimate;

(iv) Nature of response (voluntary, required for a benefit, or mandatory);

(v) Nature and extent of confidentiality; and

(vi) Need to display currently valid OMB control number;

(h) It was developed by an office that has planned and allocated resources for the efficient and effective management and use of the information to be collected.

(i) It uses effective and efficient statistical survey methodology (if applicable); and

(j) It makes appropriate use of information technology.

If you are unable to certify compliance with any of these provisions, identify the item by leaving the box unchecked and explain the reason in the Supporting Statement.

Certification Date: 01/14/2021

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