This proposed law seeks to reduce the scope for uncertainty and litigation arising from the withdrawal of a key interest rate from the UK financial system.
Critical Benchmarks (References and Administrators’ Liability) Bill [HL] (250 KB , PDF)
On 13 October 2021, the House of Lords is scheduled to debate the second reading of the Critical Benchmarks (References and Administrators’ Liability) Bill.
The aim of the bill is to reduce the scope for uncertainty and litigation arising from the withdrawal of a key interest rate which is used as a ‘benchmark’ in the UK financial system.
Benchmarks are indices used to work out amounts payable in contracts (usually financial ones). A ‘critical benchmark’ is one that is considered particularly important because of its wide use. In the UK, the only critical benchmark is the London interbank offer rate (LIBOR).
The Bank of England has stated that the calculations underlying LIBOR are increasingly unreliable, creating a systemic risk to the UK economy. Therefore, it has been working with other regulators and market participants to transition away from LIBOR. However, some contracts will face significant barriers to moving away from LIBOR. These are known as ‘tough legacy’ contracts.
The Financial Services Act 2021 amended the regulations governing benchmarks to deal with the wind-down of a critical benchmark and to manage tough legacy contracts. The changes granted the Financial Conduct Authority (FCA) certain powers, such as prohibiting new contracts from using the benchmark and prescribing how the index calculation is made.
The bill’s provisions would add further measures to the benchmark regulations that are intended to:
The Government states that reducing legal disputes related to the wind-down of LIBOR should result in lower costs for firms and lessen the risk that disputes undermine an orderly wind-down, which could in turn impact the stability of the UK financial system.
Critical Benchmarks (References and Administrators’ Liability) Bill [HL] (250 KB , PDF)
The Bank of England is considering whether to introduce a central bank digital currency (CBDC) in the UK. Unlike cryptocurrencies such as Bitcoin, CBDCs are digital forms of money issued and backed by a central bank. The House of Lords is due to debate a 2022 report by the House of Lords Economic Affairs Committee which concluded that it had “yet to hear a convincing case” for why the UK needs a CBDC.
The OFCOM (Duty regarding Prevention of Serious Self-harm and Suicide) Bill [HL] is a private member’s bill that has been introduced in the House of Lords by Baroness Finlay of Llandaff (Crossbench). Amongst its provisions, the bill would require Ofcom to establish a unit to advise the government on the extent of content on social media platforms which could be seen to encourage self-harm or suicide.
![OFCOM (Duty regarding Prevention of Serious Self-harm and Suicide) Bill [HL]: HL Bill 18 of 2022–23](https://lordslibrary.parliament.uk/content/uploads/sites/2/2020/01/Security-VIGs-568x426.jpg)
The Retained EU Law (Revocation and Reform) Bill is due to have its second reading in the House of Lords on 6 February 2023. The bill would automatically revoke, or ‘sunset’, most retained EU law at the end of 2023. However it would also give ministers powers to exempt some retained EU law from the sunset and to restate, reproduce, replace or update retained EU law by statutory instrument.
